Amount of annuity payable is inversely related to which of the following?

A. Principal sum of money

B. Investment period

C. Rate of return

D. Duration of annuity payments

Answer: Option D

Solution(By Examveda Team)

Amount of annuity payable is inversely related to duration of annuity payments. Usually, the time period is 1 year, which is why it is called an annuity, but the time period can be shorter, or even longer. These equal payments are called the periodic rent. The amount of the annuity is the sum of all payments.