Asked by Jakayla Richburg on May 13, 2024
Verified
If a series of equal payments is paid regularly out of a bank account which earns a constant rate of interest, the ____ is the amount that must be in the bank at the beginning of the series to just fund all of the payments.
A) future value of an annuity due
B) present value of an annuity due
C) future value of an ordinary annuity
D) present value of an ordinary annuity
E) None of the above
Bank Account
A financial account maintained by a bank for a customer, allowing the customer to deposit and withdraw money and possibly earn interest.
Equal Payments
Installments of the same amount paid or received over a specified period for loans, mortgages, or annuities.
Present Value
Today's monetary value of a sum to be received in the future or of future cash inflows, using a specified rate of return for calculation.
- Clarify the definition and methodology for calculating annuities, inclusive of their present and forthcoming values.
Verified Answer
Learning Objectives
- Clarify the definition and methodology for calculating annuities, inclusive of their present and forthcoming values.
Related questions
Finding the Discounted Value of $1,000 to Be Received at ...
A Series of Equal Cash Flows at Fixed Intervals Is ...
Micheline Wishes to Purchase a 25-Year Annuity Providing Payments of ...
Calculate the Future Value of an Ordinary Annuity Consisting of ...
A Government of Canada Bond Will Pay $50 at the ...