You are comparing two annuities which offer monthly payments for ten years. Both annuities are identical with the exception of the payment dates. Annuity A pays on the first of each month while annuity B pays on the last day of each month. Which one of the following statements is correct concerning these two annuities?
A) Both annuities are of equal value today.
B) Annuity B is an annuity due.
C) Annuity A has a higher future value than annuity B.
D) Annuity B has a higher present value than annuity A.
E) Both annuities have the same future value as of ten years from today.
Correct Answer:
Verified
Q1: The interest rate charged per period multiplied
Q5: Annuities where the payments occur at the
Q6: The interest rate expressed as if it
Q7: The stated rate of interest is 10%.
Q8: You are considering two projects with the
Q9: Compound interest:
A) allows for the reinvestment of
Q10: The interest rate expressed in terms of
Q13: You are comparing two investment options. The
Q15: An annuity stream where the payments occur
Q16: Discounting cash flows involves:
A) discounting only those
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents