Which is NOT an essential element of an ordinary annuity? A. The amounts of all payments are equal. B. The payments are made at equal interval of time. C. The first payment is made at the beginning of the first period. D. Compound interest is paid on all amounts in the annuity.

The correct answer is D. Compound interest is paid on all amounts in the annuity.

An ordinary annuity is a series of equal payments made at equal intervals of time for a fixed number of periods. The first payment is made at the beginning of

A compound annuity is a series of equal payments made at equal intervals of time for a fixed number of periods. The first payment is made at the beginning of the first period, and the payments continue until the end of the last period. The interest earned on a compound annuity is compound interest, which means that interest is earned on both the principal amount and the interest that has already been earned.

Therefore, compound interest is not an essential element of an ordinary annuity.