The difference between an ordinary annuityand a annuity due is:A ordinary annuity is when payments aremade at the beginning of each period,while for a annuity due the payments aremade at the end of each period.An annuity due is an annuity where theloan is repaid in one lump sum at the endof the annuity, while for an ordinaryannuity regular payments are madethroughout the period of the annuity.An annuity due is when interest iscompounded at the same time aspayments are made, while for a ordinaryannuity the interest and payment periodsare different.A ordinary annuity is when payments aremade at the end of each period, while fora annuity due the payments are made atthe beginning of each period.An ordinary annuity is when interest iscompounded at the same time aspayments are made, while for a annuitydue the interest and payment periods aredifferent.

Annuity is the uniform annual payments that are made at uniformly over the period of time of annuity…

ne difference between an rdinary annuity and a annuity due is: O A ordinary annuity is when payments are made at the beginning of each period, while for a annuity due the payments are made at the end of each period.

ne difference between an rdinary annuity and a annuity due is: O A ordinary annuity is when payments are made at the beginning of each period, while for a annuity due the payments are made at the end of each period.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9MC: The process that determines the present value of a single payment or stream of payments to be...

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The difference between an ordinary annuity and an annuity due is that each of the payments of the annuity due earns interest for one additional year (period). * True False
Annuity due is an annuity whose payment is due at the END of each period. TRUE OR FALSE?
With a deferred ordinary annuity, the first payment was made one or more periods prior. the first payment begins one or more periods later. the last payment is made first. the first payment is made last.
Which is NOT an essential element of an ordinary annuity? Select the correct response: The payments are made at equal interval of time. The amounts of all payments are equal. The first payment is made at the beginning of the first period. Compound interest is paid on all amounts in the annuity.
An ordinary annuity is best defined by which one of the following? a. Increasing payments paid for a definitive period of time. b. Equal payments paid at the end of regular intervals over a stated time period. c. Equal payments paid at the beginning of regular intervals for a limited time period. d. Equal payments that occur at set intervals for an unlimited period of time.
1.Which of the following statements is CORRECT? Statement 1. The difference between the PV of an annuity due and the PV of an ordinary annuity is that each of the payments of the annuity due is discounted by one more year (period). Statement 2. The difference between an ordinary annuity and an annuity due is that each of the payments of the annuity due earns interest for one additional year (period). Statement 3. An annuity is a series of equal payments made at fixed equal-length intervals for a specified number of periods. Statement 3 only. All of the statements are correct. None of the statement is correct. Statement 1 only. Statement 2 only. Given some amount to be received several years in the future, if the interest rate increases, the present value of the future amount will Be higher Be variable. Be lower. Cannot tell. Stay the same. WITH EXPLANATION PLEASE
An [Select] is a sequence of equal period payments. If payments are made at the end of each time interval, the annuity is called an [Select]
The present value of an annuity due is: at the same point in time as the first payment. one period before the first payment. one period after the first payment.
An annuity with payments that occur at the beginning of each period is known as a ○ annuity due ordinary annuity deferred annuity discounted annuity immediate annuity
A series of equal payments occurring at equal interval of time, known as. Ans: ____________ A type of annuity where the first payment is made at the end of the first period. Ans: ___________________ A type of annuity whose sum is infinite. Ans: _____________ A type of annuity where the first payment is made at the beginning of the first period. Ans: ______________ A type of annuity where the first payment is made later after the end of the first period. Ans: ___________________
Which of the following statement is true? a) An ordinary annuity is an annuity in which the cash flow occurs at the start of each period b) None of the above c) A deferred annuity is an annuity in which the first cash flow occurs at the end of the time period between each subsequent cash flow d) with a credit foncier loan ( a loan for a fixed period with regular repayments) as time passes a smaller proportion of each repayment goes to paying off the interest on the loan
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.