State the correct option

A. Amount of annuity depends on duration of annuity payments, principal sum of money, investment period and rate of return

B. Amount of annuity does not depend on the principal sum of money

C. Investment period has no relation to the amount of annuity

D. Annuity is independent of rate of return

Answer: Option A

Solution(By Examveda Team)

Amount of annuity depends on duration of annuity payments, principal sum of money, investment period and rate of return. An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees. Annuities are created and sold by financial institutions, which accept and invest funds from individuals and then, upon annuitization, issue a stream of payments at a later point in time.