Which of the following statements is CORRECT,assuming positive interest rates and holding other things constant?
A) The present value of a 5-year,$250 annuity due will be lower than the PV of a similar ordinary annuity.
B) A 30-year,$150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.
C) A bank loan's nominal interest rate will always be equal to or less than its effective annual rate.
D) If an investment pays 10% interest,compounded annually,its effective annual rate will be less than 10%.
E) Banks A and B offer the same nominal annual rate of interest,but A pays interest quarterly and B pays semiannually.Deposits in Bank B will provide the higher future value if you leave your funds on deposit.

Question

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The Answer of Which of the following statements is CORRECT,assuming positive interest rates and holding other things constant?
A) The present value of a 5-year,$250 annuity due will be lower than the PV of a similar ordinary annuity.
B) A 30-year,$150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage.
C) A bank loan's nominal interest rate will always be equal to or less than its effective annual rate.
D) If an investment pays 10% interest,compounded annually,its effective annual rate will be less than 10%.
E) Banks A and B offer the same nominal annual rate of interest,but A pays interest quarterly and B pays semiannually.Deposits in Bank B will provide the higher future value if you leave your funds on deposit.

Which of the Following Statements Is CORRECT,assuming Positive Interest Rates