Fund. of Financial Accounting - With Access
5th Edition
ISBN: 9781259636240
Author: PHILLIPS
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter AC, Problem 8MC
Which of the following statements is true?
- a. When the interest rate increases, the present value of a single amount decreases.
- b. When the number of interest periods increases, the present value of a single amount increases.
- c. When the interest rate increases, the present value of an annuity increases.
- d. None of the above are true.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Which of the following statements is true?a. When the interest rate increases, the present value of asingle amount decreases.b. When the number of interest periods increases, thepresent value of a single amount increases.c. When the interest rate increases, the present value of anannuity increases.d. None of the above are true.
How would an increase in the interest rate effect the present value of an annuity problem (all other variables remain the same)
If you're calculating the present value of future payments, you're using an annuity. Is this statement accurate or incorrect?
Chapter AC Solutions
Fund. of Financial Accounting - With Access
Ch. AC - Prob. 1QCh. AC - Prob. 2QCh. AC - Which of the following is most likely to be an...Ch. AC - Prob. 4QCh. AC - Prob. 5QCh. AC - Prob. 6QCh. AC - Prob. 7QCh. AC - You are saving up for a Mercedes-Benz SLR McLaren,...Ch. AC - Prob. 2MCCh. AC - Prob. 3MC
Ch. AC - Prob. 4MCCh. AC - Prob. 5MCCh. AC - Assume you bought a car using a loan that requires...Ch. AC - Assume you bought a car using a loan that requires...Ch. AC - Which of the following statements is true? a. When...Ch. AC - Prob. 9MCCh. AC - Prob. 10MCCh. AC - Prob. AC.1MECh. AC - Prob. AC.2MECh. AC - Prob. AC.3MECh. AC - Prob. AC.4MECh. AC - Prob. AC.5MECh. AC - Prob. AC.6MECh. AC - Prob. AC.7MECh. AC - Prob. AC.8MECh. AC - Prob. AC.9MECh. AC - Prob. AC.10MECh. AC - Prob. AC.11MECh. AC - Prob. AC.12MECh. AC - Prob. AC.1ECh. AC - Prob. AC.2ECh. AC - Prob. AC.3ECh. AC - Prob. AC.4ECh. AC - Prob. AC.5ECh. AC - Computing Bond Issue Proceeds and Issue Price Your...Ch. AC - Computing Missing Present or Future Values...Ch. AC - Comparing Options Using Present Value Concepts...Ch. AC - Prob. AC.2CPCh. AC - Prob. AC.3CPCh. AC - Prob. AC.4CPCh. AC - Prob. AC.1PACh. AC - Recording Equipment Purchase with Two-Year Note...Ch. AC - Prob. AC.3PACh. AC - Prob. AC.4PACh. AC - Prob. AC.1PBCh. AC - Recording Equipment Purchase with Two-Year Note...Ch. AC - Prob. AC.3PBCh. AC - Prob. AC.4PB
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- For any investment, which will always have the higher future value : an ordinary annuity or an annuity due? For any debt, which will always have a higher future value: an ordinary annuity or an annuity due?arrow_forwardHow would an increase in the interest rate or a decrease in the number of periods until the payment is received affect the present value (PV) of a sum of money? Please explain properly. Thank you!arrow_forwardThe Present Value of an Ordinary Annuity is identical to the Present Value of an Annuity Due. This statement is : a Indeterminate. b True. c False. d None of the abovarrow_forward
- Why does an annuity due have a higher present value than a similar ordinaryannuity?arrow_forwardTrue or False The future value of an ordinary annuity is less than that of an annuity duearrow_forwardWhat is the formula used in annuity due if your looking for the compounded interest rate with given are terms, payment and future value? and what is the formula used to get the terms?arrow_forward
- Which of the following characteristics is a necessary feature for pricing a set of cash flows as an ordinary annuity? Group of answer choices The period of time between each cash flow must not vary. More than one of the other options are correct. The cash flows must not be a fixed, regular amount. The cash flows must occur on a yearly basis.arrow_forwardIllustrate with examples , that Interest rate is equivalent to the savings rate from the deposits?arrow_forwardMay I ask for an explanation of the question for a better understanding. Thank you! Which of the following statements is NOT TRUE? a. In an annuity due, payments occur at the beginning of the period. b. A perpetuity will never mature at any point in future. c. The present value of a perpetuity can be calculated. d. In an ordinary annuity, payments occur at the beginning of the period.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
What is an Annuity? Are Annuities a Good Investment? Basics of an Annuity, a Whiteboard Animation; Author: Learn to invest;https://www.youtube.com/watch?v=Wq7nq8Gx78w;License: Standard YouTube License, CC-BY