« previous next »

Author Question: Ordinary annuity payments occur at the beginning of the period, whereas annuity due payments occur ... (Read 143 times)

P68T

  • Hero Member
  • *****
  • Posts: 509
on: Jul 10, 2018
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

  • Sr. Member
  • ****
  • Posts: 358
Reply #1 on: Jul 10, 2018
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


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Did you know?

The Babylonians wrote numbers in a system that used 60 as the base value rather than the number 10. They did not have a symbol for "zero."

Did you know?

Side effects from substance abuse include nausea, dehydration, reduced productivitiy, and dependence. Though these effects usually worsen over time, the constant need for the substance often overcomes rational thinking.

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

Mutualisms, such as those that occur among plants and pollinators, generally involve large numbers o Mutualisms, such as those that occur among plants and pollinators, generally involve large numbers o
The nurse needs to inform the patient with impaired vision when a touch is to occur and ask permissi The nurse needs to inform the patient with impaired vision when a touch is to occur and ask permissi
The Black Death spread over much of Europe in a three-year period in the middle of the fourteenth ce The Black Death spread over much of Europe in a three-year period in the middle of the fourteenth ce
Dermatological changes with myxedema can occur behind the eyes or in the lower leg, as shown here. Dermatological changes with myxedema can occur behind the eyes or in the lower leg, as shown here.
Does pregnancy occur during breastfeeding? "هل يحدث حمل أثناء الرضاعة Does pregnancy occur during breastfeeding? "هل يحدث حمل أثناء الرضاعة
What single payment one year from now would be economically equivalent to payments of $1,000 ... What single payment one year from now would be economically equivalent to payments of $1,000 ...
Video: Allergic Rhinitis

For a complete list of videos, visit our video library