When using a future value of an annuity table (e.g., Table III at the back of the book), _____.
A) payments are assumed to be made at the end of each period
B) FVIFA factors increase with an increase in the interest rate
C) FVIFA factors increase with an increase in the number of periods
D) All of these are correct

Question

Quizplus · Accepted Answer

All of these statements are correct. An annuity table assumes that payments are made at the end of each period, FVIFA factors increase with an increase in the interest rate, and FVIFA factors increase with an increase in the number of periods. Therefore, all of these factors are considered when using a future value of an annuity table.

When Using a Future Value of an Annuity Table (E