1. An plain annuity is best characterized by which one of the following? A. Increasing payments passist for a definitive period of time.B. Increasing payments paid forever before.C. Equal payments passist at the end of consistent intervals over a proclaimed time period.D. Equal payments passist at the start of consistent intervals for a restricted time period.E. Equal payments that happen at collection intervals for an limitless period of time.
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2. Which one of the adhering to accurately specifies a perpetuity? A. A restricted variety of equal payments phelp in even time increments.B. Payments of equal amounts that are phelp iron a regular basis but inabsolutely.C. Varying quantities that are paid at even intervals forever before.D. Unending equal payments passist at equal time intervals.E. Unending equal payments paid at either equal or unequal time intervals.
A Canadian consol is finest categorized as: A. An plain annuity.B. An amortized cash circulation.C. An annuity due.D. A discounted loan.E. A perpetuity.
The interest rate that is most generally quoted by a lender is referred to as which among the following? A. Annual percent price.B. Compound rate.C. Effective yearly rate.D. Simple price.E. Common rate.
5. An interemainder price on a loan that is compounded monthly but expressed as an yearly price would certainly be an instance of which among the following rates? A. Stated rate.B. Discounted yearly rate.C. Effective yearly price.D. Periodic monthly price.E. Consolidated monthly price.
Your credit card charges you 1.5 percent interest per month. This price when multiplied by 12 is dubbed the: A. Effective yearly price.B. Annual percentage rate.C. Periodic interemainder rate.D. Compound interest rate.E. Period interest price.
7. A loan wbelow the borrower receives money this day and repays a solitary lump sum on a future day is dubbed a(n) _____ loan. A. Amortized.B. Continuous.C. Balloon.D. Pure discount.E. Interest-just.
Which one of the following terms is used to describe a loan that calls for regular interest payments and also a lump amount primary payment? A. Amortized loan.B. Modified loan.C. Balloon loan.D. Pure discount loan.E. Interest-only loan.
Amortized loans must have actually which among these characteristics? A. Either equal or unequal major payments over the life of the loan.B. One lump-amount principal payment.C. Increasing payments over the life of the loan.D. Equal interemainder payments over the life of the loan.E. Declining regular payments.
Which among the complying with terms is identified as a loan wherein the continual payments, including both interest and also principal amounts, are insufficient to retire the entire loan amount, which then need to be repassist in one lump sum? A. Amortized loan.B. Continuing loan.C. Balloon loan.D. Pure discount loan.E. Interest-just loan.
You are comparing 2 annuities that offer quarterly payments of $2,500 for five years and also pay .75 percent interemainder per month. You will certainly purchase one of these today via a solitary lump amount payment. Annuity A will certainly pay you monthly, starting this day, while annuity B will certainly pay monthly, starting one month from this particular day. Which one of the following statements is correct concerning these 2 annuities? A. These annuities have actually equal current values but unequal future worths.B. These two annuities have actually both equal existing and also future worths.C. Annuity B is an annuity due.D. Annuity A has a smaller future worth than annuity BE. Annuity B has actually a smaller existing worth than annuity A
You are comparing 2 investment options that each pay 6 percent interest, compounded annually. Both alternatives will certainly administer you via $12,000 of income. Option A pays $2,000 the first year followed by two yearly payments of $5,000 each. Option B pays three annual payments of $4,000 each. Which one of the complying with statements is correct given these two investment options? Assume a positive discount rate. A. Both options are of equal value since they both carry out $12,000 of earnings.B. Option A has actually the better future value at the end of year 3.C. Option B has actually a greater current value at time zero.D. Option B is a perpetuity.E. Option A is an annuity.
You are considering 2 tasks through the following cash flows: Project X Project YYear 1 $8,500 $7,000Year 2 8,000 7,500Year 3 7,500 8,000Year 4 7,000 8,500Which among the complying with statements is true concerning these 2 projects provided a positive discount rate? A. Both tasks have actually the very same future value at the end of Year 4.B. Both projects have actually the same value at Time 0.C. Both jobs are plain annuities.D. Project Y has a higher present value than Project X.E. Project X has both a higher present and a higher future worth than Project Y.
Which one of the complying with statements is correct provided the complying with two sets of task cash flows? Assume a positive discount rate. Project A Project BYear 1 $4,000 $2,000Year 2 3,000 3,000Year 3 0 2,000Year 4 3,000 3,000 A. The cash flows for Project B are an annuity, yet those of Project A are not.B. Both sets of cash flows have equal current worths as of time zero.C. The existing value at time zero of the final cash circulation for Project A will be discounted utilizing an exponent of three.D. Both jobs have actually equal values at any suggest in time considering that they both pay the exact same amount in complete.E. Project B is worth less today than Project A.
Which among the complying with statements concerned annuities and perpetuities is correct? A. An plain annuity is worth more than an annuity due given equal annual cash flows for 10 years at 7 percent interemainder, compounded annually.B. A perpetuity composed of $100 monthly payments is worth more than an annuity of $100 monthly payments provided equal discount rates.C. Many loans are a type of a perpetuity.D. The present worth of a perpetuity cannot be computed however the future value deserve to.E. Perpetuities are finite but annuities are not.
A perpetuity composed of 100 months payments is worth more than an annuity of 100 monthly payments given equates to discount rates
Which one of the following statements pertained to loan interest rates is correct? A. The yearly portion price considers the compounding of interemainder.B. When comparing loans you need to compare the reliable annual rates.C. Lenders are a lot of apt to quote the efficient yearly rate.D. Regardless of the compounding period, the effective yearly rate will certainly always be greater than the yearly portion rate.E. The even more frequent the compounding period, the reduced the effective annual price given a resolved annual portion price.
Which one of the following statements concerning interest prices is correct? A. Savers would favor yearly compounding over monthly compounding provided the very same yearly portion price.B. The effective annual rate decreases as the number of compounding periods per year boosts.C. The efficient annual rate amounts to the annual portion price as soon as interest is compounded every year.D. Borrowers would certainly prefer monthly compounding over yearly compounding provided the exact same annual portion price.E. For any positive price of interest, the annual portion price will constantly exceed the reliable annual rate.
Which one of these statements regarded thriving annuities and perpetuities is correct? A. You can compute the existing value of a thriving annuity however not a thriving perpetuity.B. In computing the current worth of a thriving annuity, you discount the cash flows using the expansion rate as the discount rate.C. The future worth of an annuity will certainly decrease if the growth rate is boosted.D. An boost in the price of development will certainly decrease the existing value of an annuity.E. The current value of a thriving perpetuity will certainly decrease if the discount price is raised.
Which among the adhering to statements effectively defines a time value of money relationship? A. Time and also future values are inversely connected, all else hosted consistent.B. Interemainder rates and time are positively related, all else hosted consistent.C. An increase in a positive discount price rises the present value.D. An boost in time boosts the future value provided a zero rate of interest.E. Time and also existing worth are inversely associated, all else organized continuous.
Which among the complying with compounding durations will yield the lowest efficient yearly price offered a declared future value at year 5 and also an yearly percentage price of 10 percent? A. Annual.B. Semiyearly.C. Monthly.D. Daily.E. Continuous.
The whole repayment of which among the complying with loans is computed simply by computer one single future value? A. Interest-only loanB. Balloon loan.C. Amortized loan.D. Pure discount loan.E. Bullet loan.
How is the principal amount of an interest-only loan repaid? A. The major is forprovided over the loan period; hence it does not have to be rephelp.B. The principal is repaid in decreasing increments and also contained in each loan payment.C. The major is rephelp in one lump sum at the finish of the loan period.D. The primary is rephelp in equal annual payments.E. The principal is repaid in raising increments through constant monthly payments.
An amortized loan: A. Requires the primary amount to be repassist in even increments over the life of the loan.B. May have actually equal or enhancing quantities applied to the major from each loan payment.C. Requires that all interemainder be repassist on a monthly basis while the principal is repaid at the end of the loan term.D. Requires that all payments be equal in amount and also include both major and interest.E. Repays both the principal and also the interest in one lump amount at the end of the loan term.
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You require $25,000 this day and have actually made a decision to take out a loan at 7 percent for 5 years. Which one of the following loans would be the least expensive? Assume all loans need monthly payments and also that interest is compounded on a monthly basis.A. Interest-just loan.B. Amortized loan with equal primary payments.C. Amortized loan via equal loan payments.D. Discount loan.E. Balloon loan wright here 50 percent of the primary is repassist as a balloon payment.