Finance

As the discount rate increases, the present value of $ d to be earnd six age from now DECREASES.Sun leeward has $500 today. Which one of the by-line statements is correct if she invests this notes at a positive rate of avocation for five years? At the end of the five years Sun leeward will have less money if she invests at 5 percent rather than at 7 percent. The process of accumulating interest on an investment over cartridge clip to earn more interest called COMPOUNDING.Katie is going to receive $1,000 3yrs from now. Wilt is going to receive $1,000 5yrs from now.Which one of the following statements is correct if both Katie and Wilt gift a 5 percent discount rate to these amounts? Katies money is worth more than Wilts money today.An annuity stream of interchange flow payments is a set of level cash flows put acrossring for each one time period for a fixed length of time. Annuities where the payments occur at the end of each time period be called ORDINARY ANNUITIES, whereas ANNUTIES DUE payments occur at the beg. of each time period. An annuity stream where the payments occur forever is called PERPETUITY. The interest rate explicit in terms of the interest payment make each period is called the STATED INT. rate. The interest rate expressed as if it were compounded once per year is called the EFFECTIVE one-year rate.



The interest rate charged per period multiplied by the number of periods per year is called the ANNUAL PERCENTAGE rate. You are analyze 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? Annuity A has a high future value than annuity B. A perpetuity differs from an annuity because perpetuity payments never cease. An amortized give may have touch or increasing amounts applied to the principle from each loan payment. *You are...If you want to get a full essay, order it on our website: Orderessay



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