An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the

• A. Cash ratio
• B. Depreciation by sinking fund method
• C. Manufacturing cost
• D. Discrete compound interest

Answer: (B)