9. Which two of the following statements is FALSE (CHOOSE TWO) a. In an ordinary annuity, payments are made at the end of each payment period. b. A mortgage can be considered an annuity. C. Accepting a payment plan for a purchase results in spending the same amount as the original price but spread out over a longer time period. d. Monthly car payments includes interest e. Quarterly payments are made every 4 months. f. The future value of an ordinary simple annuity can be calculated as the sum of a series compound interest calculations

9. Which two of the following statements is FALSE (CHOOSE TWO) a. In an ordinary annuity, payments are made at the end of each payment period. b. A mortgage can be considered an annuity. C. Accepting a payment plan for a purchase results in spending the same amount as the original price but spread out over a longer time period. d. Monthly car payments includes interest e. Quarterly payments are made every 4 months. f. The future value of an ordinary simple annuity can be calculated as the sum of a series compound interest calculations

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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- a. Use the appropriate formula to find the value of the annuity. b. Find the interest. Periodic Deposit Rate $1500 at the end of every three months 5.25% compounded quarterly Click the icon to view some finance formulas. Time 7 years a. The value of the annuity is $. (Do not round until the final answer. Then round to the nearest dollar as needed.) b. The interest is $ (Use the answer from part (a) to find this answer. Round to the nearest dollar as needed.) Time
9. Examine the time line for Now the annuity shown. 250 (1.015) 250 (1.015) 250 (1.015) E 250 (1.015)23 250 (1.015) a) What is the duration of this annuity? How can you tell? b) Determine the annual rate of interest and the number of compounding periods per year. c) Determine the present value of this annuity. d) Determine the total interest earned. ANSWER 9. a) 6 years b) 6%; 4 compounding periods per year c) $5007.60 d) $992.40 Time (3-month periods) 1 2 250 250 250 250 250 3 23 24 H-H
ook ences Chris Seals has just given an insurance company $62,525. In return, she will receive an annuity of $7,458 for 12 years. a. At what rate of return must the insurance company invest this $62,525 to make the annual payments? (Use a Financial calculator to arrive at the answers. Round the final answer to 3 decimal places.) Rate of return b. What rate of return is required if the annuity is payable at the beginning of each year? (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.) Rate of return
1. What is the different between an ordinary annuity and an annuity due? Which occursmore in practice? Give a common example of both. 2. Using the example of a savings account, explain the difference between the effectiveannual rate and the annual percentage rate. 3. A mortgage instrument pays $1.5 million at the end of each of the next two years. Aninvestor has an alternative investment with the same amount of risk that will payinterest at 8% compounded semiannually. what the investor should pay for themortgage instrument?
2 Given a set of present value tables, an annual interest rate, the dollar amount of equal payments made, and the number of semiannual payments, what other information is necessary to calculate the present value of the series of payments? A. The future value of the annuity. B. The timing of the payments (whether they are at the beginning or end of the period). C. The rate of inflation. D. No other information is required.
Which of the following is false? The future value of a deferred annuity is equal to the future value of an annuity not deferred. If the first payment is received at the end of the fifth period, it means the ordinary annuity is deferred for five periods. The present value of a deferred annuity is less than the present value of an annuity not deferred. To calculate the present value of a deferred annuity, determine the present value of an ordinary annuity for the entire period and subtract the present value of the payments which were not received during the deferral period.
Please use a physical TIMELINE to solve.
Subject:- finance
Find the following values assuming a regular, or ordinary, annuity: a. The present value of $400 per year for ten years at 10 percent. b. The future value of $400 per year for ten years at 10 percent. c. The present value of $200 per year for five years at 5 percent.d. The future value of $200 per year for five years at 5 percent.Repeat Problem above but assume the annuities are annuities due.(Dollar signs, decimal places, and commas all matter)
1. An ordinary annuity has cash flows at the end of each period. True or False 2. Compounding interest means that interest will generate in every time period. True or False 3. The present value of a $100 perpetuity discounted at 10% is $1,000. True or False 4. A rational investor would prefer to receive $1,200 today rather than $100 per month for 12 months. True or False
solve correctly show all steps neatly
What is the future value of a 6%, 5-year ordinary annuity that pays $450 each year? Do not round intermediate calculations. Round your answer to the nearest cent. If this were an annuity due, what would its future value be? Do not round intermediate calculations. Round your answer to the nearest cent

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