a. Calculate the present value of the annuity assuming that it is (1) An ordinary annuity, b. Compare your findings in parts a[1] and a(2). All else being identical, which typ of annuity-ordinary or annuity due-is preferable? Explain why,

Q: c) Does every loan, which consists of an initial outlay followed by a sequence of re- ceipts, have a…

A: A loan can be defined as the financial support received from the lender by the borrower. In…

Q: Solve the following by using formulas. Do not round intermediate calculations. Round your answer to…

A: The calculation is done below: The formula sheet of the above value represented below:

Q: o calculate the Internal Rate of Return, you need to know what interest rate to start with. True or…

A: Internal rate of return (IRR) is the rate at which NPV is zero

Q: Explain the difference between each of the following pairs of terms. For each you must include an…

A: a)Common Difference is the difference between the Term and the term that follows it  The ratio is…

Q: what is an annuity? Provide an example

A: Annuity is an important concept in finance especially in the context of time value of money. Annuity…

Q: You should find that your answer in part c) is larger than your answer in part b). By considering…

A: This is general practice to be followed universally that if a person choose to pay any loan amount…

Q: Describe the two forms that the calculation of the payback period can take?

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: Write the methods of Calculating Interest?

A: Methods of calculating interest: The basic and fundamental methods for calculating interests are…

Q: Fill in the blank with an appropriate​ word, phrase, or symbol.   When using the simple interest​…

A: A person is depositing or putting some money as an investment for the purpose of gaining returns.…

Q: Explain the addition to the interest rate, HELOC borrowers consider the issues?

A: Home buyers mostly take loans to buy the home and they will pay the debt in equated installments.…

Q: Which one of the following is the annuity present value formula? OCx ((1 [1/(1+r)t]} -r) OCx ((1…

A: Solution:-When an equal amount is paid each period, it is known as annuity.

Q: When valuing a short-term security, we commonly use:

A: Introduction: Short-term securities refer to securities that have a life tenure of less than one…

Q: Describe the process of using the risk-adjusted discount rateto calculate the net present value?

A: Net present value (NPV) is the excess of present value of cash inflows over the present value of…

Q: How can we determine the Net Present-Worth Amounts at Varying Interest Rates?

A: Answer: Net present worth is an estimation method applied to various time intervals when cash flows…

Q: Assume that the variables I, N, and PV represent the interest rate, investment or deposit period,…

A: Compound interest formula: Future value = Present value *(1+rate)^years. Answer: FV = PV x (1 + I)NN

Q: e following statements about annuities are true? Ch hnuity due earns more interest than an ordinary…

A: Annuities are instruments that involve fixed payments. There are mainly two types of annuities i.e.…

Q: Which of the following is not a variable in the basic present value equation? Multiple Choice…

A: Investors are holding securities for the purpose of gaining the returns. The return is calculated…

Q: You should find that your answer in part c) is larger than your answer in part b). By considering…

A: We know that if borrower choose to pay in longer period the installment amount is lower but the…

Q: How can we determine the amount of a periodic payment?

A: The amount of periodic payment is determined using the following formula: