7. Future value of annuitiesThere are two categories of cash flows: single cash flows, referred to as "lump sums," and annuities. Based on your understanding of annuities,answer the following questions.Which of the following statements about annuities are true? Check all that apply.When equal payments are made at the beginning of each period for a certain time period, they are treated as an annuity due.When equal payments are made at the beginning of each period a certain time period, they are treated as ordinary annuities.An ordinary annuity of equal time earns less interest than an annuity due.Annuities are structured to provide fixed payments for a specified period of time.Which of the following is an example of an annuity?O A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of timeO An investment in a certificate of deposit (CD)Katie had a high monthly food bill before she decided to cook at home every day in order to reduce her expenses. She starts to save $1,060 everyyear and plans to renovate her kitchen. She deposits the money in her savings account at the end of each year and earns 14% annual interest. Katie'ssavings are an example of an annuity. If Katie decides to renovate her kitchen, how much would she have in her savings account at the end of sevenyears?O $4,545.60O $11,374.32O $9,668.17O $12,966.73If Katie deposits the money at the beginning of every year and everything else remains the same, she will saveyears.by the end of seven

Answered: Image /qna-images/answer/626a5639-1f22-4b5c-92e4-8c374a99543a.jpg

7. Future value of annuities There are two categories of cash flows: single cash flows, referred to as "lump sums," and annuities. Based on your understanding of annuities, answer the following questions. Which of the following statements about annuities are true? Check all that apply. When equal payments are made at the beginning of each period for a certain time period, they are treated as an annuity due. When equal payments are made at the beginning of each period for a certain time period, they are treated as ordinary annuities. An ordinary annuity of equal time earns less interest than an annuity due. Annuities are structured to provide fixed payments for a specified period of time. Which of the following is an example of an annuity? A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time An investment in a certificate of deposit (CD) Katie had a high monthly food bill before she decided to cook at home every day in order to reduce her expenses. She starts to save $1,060 every year and plans to renovate her kitchen. She deposits the money in her savings account at the end of each year and earns 14% annual interest. Katie's savings are an example of an annuity. If Katie decides to renovate her kitchen, how much would she have in her savings account at the end of seven years? $4,545.60 $11,374.32 $9,668.17 $12,966.73 If Katie deposits the money at the beginning of every year and everything else remains the same, she will save years. by the end of seven

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9MC: The process that determines the present value of a single payment or stream of payments to be...