The present value of an ordinary annuity is determined on the last day of the first annuity period. on the first day of the first annuity period. on the last day of the last annuity period. immediately before the first cash flow in the series occurs.
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The present value of an ordinary annuity is determined
- on the last day of the first annuity period.
- on the first day of the first annuity period.
- on the last day of the last annuity period.
- immediately before the first cash flow in the series occurs.
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- The present value of an annuity due is determined on the last day of the first annuity period. on the first day of the last annuity period. on the last day of the last annuity period. on the date of the first cash flow in the series.For each of the following cases, calculate the present value of the annuity, assuming the annuity cash flows occur at the end of each year. SEE DETAILS IN PICIn the provided formulas, P is the deposit made at the end of each compounding period, r is the annual interest rate of the annuity in decimal form, n is the number of compounding periods per year, and A is the value of the annuity after t years. Periodic Deposit $1500 at the end of every three months Rate 7.25% compounded quarterly Time…
- With a deferred ordinary annuity, the first payment was made one or more periods prior. the first payment begins one or more periods later. the last payment is made first. the first payment is made last.The future value of an annuity due is determined one period after the first cash flow in the series. a.True b.FalseAn annuity in which the first cash flow occurs at the beginning of the period is called a/an: Oordinary perpetuity. growth annuity. Oordinary annuity. annuity due.
- Which of the following statements is CORRECT? The cash flows for an annuity may vary from period to period, but they must occur at regular intervals, such as once a year. The cash flows for an annuity due must all occur at the beginning of the periods. The cash flows for an ordinary annuity occur at the beginning of the periods. If some cash flows occur at the beginning of the periods while others occur at the ends, then we have what the textbook defines as an ordinary annuity. If a series of unequal cash flows occurs at regular intervals, such as once a year, then the series is by definition an annuity.If $417.00 is deposited at the end of each year for 6 years into an ordinary annuity earning 4.08% interest compound semiannually, construct a balance sheet showing the interest earning during each year and the balance at the end of each year. Assume this annuity rounds the interest and balance to the nearest penny at the end of each year.A perpetuity can be described as: an annuity that lasts longer than 25 years an amount of interest that is annually adjusted and is paid forever an annuity that goes on forever paid until the principal has been repaid
- In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.) $295 monthly at 5.8% to accumulate $25,000."The payments are made monthly and its compounding periods is quarterly." What kind of annuity is this? a. simple annuity b. general annuityFor each of the following situations involving annuities, solve for the unknown (?). Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (i = interest rate, and n = number of years) Present Value Annuity Amount i n1. ? $ 3,000 8% 52. $ 242,980 75,000 ? 43. 161,214 20,000 9 ?4. 500,000 80,518 ? 85. 250,000 ? 10 4 Sandy Kupchack just graduated from State University with a bachelor’s degree in history. During her four years at the university, Sandy accumulated $12,000 in student loans. She asks for your help in determining the…