In the time diagram below, which of the following concepts is depicted? PV 1 $1 2 $1 3 $1 O Present value of an annuity due O Future value of an ordinary annuity Present value of an ordinary annuity O Future value of an annuity due $1
In the time diagram below, which of the following concepts is depicted? PV 1 $1 2 $1 3 $1 O Present value of an annuity due O Future value of an ordinary annuity Present value of an ordinary annuity O Future value of an annuity due $1
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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![In the time diagram below, which of the following concepts is depicted?
[Time Diagram Description]
- The diagram shows a timeline with markings at points 0, 1, 2, 3, and 4.
- At each point from 1 to 4, there is a payment of $1.
- A "PV" (Present Value) arrow points leftward from the timeline.
[Multiple Choice Options]
- ○ Present value of an annuity due
- ○ Future value of an ordinary annuity
- ○ Present value of an ordinary annuity
- ○ Future value of an annuity due
This diagram represents the concept of the present value of an ordinary annuity, where equal payments are made at the end of each period. The "PV" indicates calculating the present value of these payments.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbf3d27b8-9870-4dd6-91a1-e79db3e1a9b0%2Fa7175452-a7b8-49f5-b190-4d7ae7b1c0bd%2Fzfxgseuq_processed.png&w=3840&q=75)
Transcribed Image Text:In the time diagram below, which of the following concepts is depicted?
[Time Diagram Description]
- The diagram shows a timeline with markings at points 0, 1, 2, 3, and 4.
- At each point from 1 to 4, there is a payment of $1.
- A "PV" (Present Value) arrow points leftward from the timeline.
[Multiple Choice Options]
- ○ Present value of an annuity due
- ○ Future value of an ordinary annuity
- ○ Present value of an ordinary annuity
- ○ Future value of an annuity due
This diagram represents the concept of the present value of an ordinary annuity, where equal payments are made at the end of each period. The "PV" indicates calculating the present value of these payments.
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