0 of 30 questions Question 19 (1 point) Page 1: Annuity due compared to ordinary
ID: 2595339 • Letter: 0
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0 of 30 questions Question 19 (1 point) Page 1: Annuity due compared to ordinary annuity lts in a: 1) Higher value 2) Lower value 3) Same value 04) value 3 times the annuity due 5) None of the above 10 11 12 Question 20(1 point) 13 14 15 The present value of an ordinary annuity: 1) Tells how much money we need to invest in the future 2) Is a lump sum 16 17 18 3) Can only be calculated manually 4) Indicates how much money needs to be invested today 5) None of the above 19 20 21 22 23 24 25 26 27 Question 21 (1 point) James Dean promised to pay his son $400 semiannually for 5 years. If James can invest his money at 10 percent in an ordinary annuity, James must invest how much today? (Use the tables in the handbook) 28 29 30 1) $5.031.16 2) $5.130.02 3) $3088.68 4) $3808.08 5) None of the above Legend a Saved Response Unsaved Response into itom SaveExplanation / Answer
19. Correct option
Higher value
Explanation:
Following formula implies that both the PV and the FV of an annuity due will be greater than their ordinary annuity value:
Annuity due=Annuity ordinary × (1+i)
20.
Option 4 is correct
Indicate how much money needs to be invested today.
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