Question 1

An annuity due requires that deposits or payments be made at the end of the period.

Accepted Answer

A) True 
 B)False

Question 2

Contingent annuities:

Accepted Answer

A)  Have a fixed amount of payments 
B)  Pay for 30 years 
C)  Are only paid by the month 
D)  Have no fixed amount of payments 
E)  None of these 
A)  Have a fixed amount of payments 
B)  Pay for 30 years 
C)  Are only paid by the month 
D)  Have no fixed amount of payments 
E)  None of these

Question 3

Annuity due payments are made:

Accepted Answer

A)  Monthly 
B)  At the beginning of the period 
C)  Yearly 
D)  At the end of the period 
E)  None of these 
A)  Monthly 
B)  At the beginning of the period 
C)  Yearly 
D)  At the end of the period 
E)  None of these

Question 4

Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe earns is 8% annually. The final value of Joe's investment at the end of the 20th year on this ordinary annuity is (use the tables in the handbook):

Accepted Answer

A)  $411,588.00 
B)  $88,362.90 
C)  $411,858.00 
D)  $88,632.90 
E)  None of these 
A)  $411,588.00 
B)  $88,362.90 
C)  $411,858.00 
D)  $88,632.90 
E)  None of these

Question 5

An ordinary annuity results in the deposit or payment being made at end of the period.

Accepted Answer

A) True 
 B)False

Question 6

An annuity due provides a lower final value compared with an ordinary annuity.

Accepted Answer

A) True 
 B)False

Question 7

An annuity due can use the ordinary annuity table if one extra period is added and:

Accepted Answer

A)  Add one payment to total value 
B)  Subtract one payment from total value 
C)  Add two payments to total value 
D)  Subtract three payments from total value 
E)  None of these 
A)  Add one payment to total value 
B)  Subtract one payment from total value 
C)  Add two payments to total value 
D)  Subtract three payments from total value 
E)  None of these

Question 8

Payments in annuities must be made:

Accepted Answer

A)  Daily 
B)  Quarterly 
C)  Semiannually 
D)  Yearly 
E)  None of these 
A)  Daily 
B)  Quarterly 
C)  Semiannually 
D)  Yearly 
E)  None of these

An annuity due requires that deposits or payments be made at the end of the period.

Contingent annuities:

Annuity due payments are made:

Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe earns is 8% annually. The final value of Joe's investment at the end of the 20th year on this ordinary annuity is (use the tables in the handbook):

An ordinary annuity results in the deposit or payment being made at end of the period.

An annuity due provides a lower final value compared with an ordinary annuity.

An annuity due can use the ordinary annuity table if one extra period is added and:

Payments in annuities must be made:

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

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Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters

Exam 13: Annuities and Sinking Funds

An annuity due requires that deposits or payments be made at the end of the period.

Contingent annuities:

Annuity due payments are made:

Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe earns is 8% annually. The final value of Joe's investment at the end of the 20th year on this ordinary annuity is (use the tables in the handbook):

An ordinary annuity results in the deposit or payment being made at end of the period.

An annuity due provides a lower final value compared with an ordinary annuity.

An annuity due can use the ordinary annuity table if one extra period is added and:

Payments in annuities must be made:

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters