4. 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 Ordinary annuities make fixed payments at the beginning of each period for a certain time period. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. An annuity due earns more interest than an ordinary annuity of equal time. An annuity is a series of equal payments made at fixed intervals for a specified number of periods Which of the following is an example of an annuity? 0 A job contract that pays a regular monthly salary for three years O A job contract that pays an hourly wage based on the work done on a particular day 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 saving:s account at the end of each year and earns 10% 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 three years? O $2,982.31 O $2,636.06 O $3,508.60 O $3,859.46 If Katie deposits the money at the beginning of every year and everything else remains the same, she will save by the end of three years
4. 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 Ordinary annuities make fixed payments at the beginning of each period for a certain time period. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. An annuity due earns more interest than an ordinary annuity of equal time. An annuity is a series of equal payments made at fixed intervals for a specified number of periods Which of the following is an example of an annuity? 0 A job contract that pays a regular monthly salary for three years O A job contract that pays an hourly wage based on the work done on a particular day 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 saving:s account at the end of each year and earns 10% 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 three years? O $2,982.31 O $2,636.06 O $3,508.60 O $3,859.46 If Katie deposits the money at the beginning of every year and everything else remains the same, she will save by the end of three years
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:4. 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
Ordinary annuities make fixed payments at the beginning of each period for a certain time period.
An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period.
An annuity due earns more interest than an ordinary annuity of equal time.
An annuity is a series of equal payments made at fixed intervals for a specified number of periods
Which of the following is an example of an annuity?
0 A job contract that pays a regular monthly salary for three years
O A job contract that pays an hourly wage based on the work done on a particular day
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 saving:s
account at the end of each year and earns 10% 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 three years?
O $2,982.31
O $2,636.06
O $3,508.60
O $3,859.46
If Katie deposits the money at the beginning of every year and everything else remains the same, she will save
by the end of three years
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