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This activity contains 10 questions.
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An ordinary annuity is where the periodic payments are made at the end of the payment interval.
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The present value of an annuity is the algebraic summarization of the present value of single amounts of money (the PV=FV/(1+i)^n).
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The negative n portion of the present value annuity formula causes the formula to calculate the same number as using a positive n and then dividing the result into one ( (1+i)^-n = 1/(1+i)^n).
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The difference between the amount deposited into an account and the balance in the account is interest.
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If the interest rate is compounded quarterly and you are calculating the number of months. Multiply the number of periods by four.
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A simple annuity is an annuity in which the conversion period and the payment interval do not coincide.
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The future value of an annuity is represented by the formula FV=PV/(1+i)^n).
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The compounding or accumulation factor for annuities is the factor FV=PV/(1+i)^-n).
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When you multiply the interest rate per year by the compounding interval, the result is the periodic rate of interest.
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The cash value of a loan is equal to the down payment minus the present value of the periodic payments.
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What are the 4 types of annuities?
The 4 types of annuities.
Immediate annuities: The lifetime guaranteed option..
Deferred annuities: The tax-deferred option..
Fixed annuities: The lower-risk option..
Variable annuities: The highest upside option..
Is annuity where the payment interval does not coincide with the interest conversion period?
A simple annuity is an annuity in which the conversion period and the payment interval do not coincide.
When payments are equal the annuity is called?
If the periodic payments are all equal, the annuity is called level of uniform annuity.
What is simple annuity and general annuity?
Simple Annuities Due are annuities where payments are made at the beginning of. each period and the compounding period is EQUAL to the payment period (P/Y = C/Y) General Annuities Due are annuities where payments are made at the beginning of.