An annuity due means that the
payments occur:
|
a. |
At the end of the period |
|
|
b. |
At the beginning of the period |
|
|
c. |
In the middle of the period |
- An annuity due is worth more
than an annuity because:
|
a. |
Each payment is compounded for |
|
|
b. |
Each payment is compounded for |
|
|
c. |
Each payment is discounted for |
- If the formula for the
future value of an amount of money is FV= PV(1+I)n , then
the formula for the PV of an amount of money is:
|
a. |
PV = FV/(1+I)n |
|
|
b. |
PV = FV + I |
|
|
c. |
PV = FV/In |
- In the formula for the future
value of an amount of money FV= PV(1+I)n , N is equal to:
|
a. |
Nominal interest rate |
|
|
b. |
Negative 1 |
|
|
c. |
Number of periods |
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