Author Question: Ordinary annuity payments occur at the beginning of the period, whereas annuity due payments occur ... (Read 130 times)

P68T

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Ordinary annuity payments occur at the beginning of the period, whereas annuity due payments occur at the end of the period.
 
  Indicate whether the statement is true or false.

Question 2

You have accumulated 800,000 for your retirement. How much money can you withdraw in equal annual beginning-of-the-year cash flows if you invest the money at a rate of 7 for thirty years?
 
  A) 64,469.12
  B) 60,251.52
  C) 8,469.12
  D) 9,061.96



fatboyy09

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Answer to Question 1

Answer: FALSE
Explanation: Annuity due cash flows are at the beginning of the period.

Answer to Question 2

Answer: B
Explanation: B)
PMT = PV /  (1 + r)1 = 800,000 /  (1.07)1 = 60,251.52.
MODE = BEGIN
INPUT 30 7 -800,000 ? 0
KEY N I/Y PV PMT FV
CPT 60,251.52



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