Q16. A(n) __________ __________ is an annuity with payments made at the end of e
ID: 3142074 • Letter: Q
Question
Q16. A(n) __________ __________ is an annuity with payments made at the end of each period.
a. annuity certain
b. term annuity
c. annuity due
d. annual annuity
e. none of the above
Q17. Payments into a sinking fund are always made when?
a. when the funds are available
b. at the end of each period
c. lump sum at the beginning of the sinking fund
d. at the beginning of each period
e. none of the above
Q18. The primary mortgage on a home is called the:
a. collateral
b. real mortgage
c. first mortgage
d. FNMA
Q19. The difference between the monthly payments on a $95,000.00 mortgage at 5% versus 6% for 25 years is:
a. $65.05
b. $56.05
c. $56.50
d. $56.60
Q20. Points represent:
a. monthly payments
b. a 3 percent up front payment
c. an additional cost of financing
d. 2 percent of the amount borrowed
Explanation / Answer
16) b
A term annuity is an annuity with payments made at the end of each period.
17) e . none of the above
A sinking fund is a means of repaying funds that were borrowed through a bond issue. The issuer makes periodic payment to a trustee who retires part of the issue but purchasing the bond in the open market.
18) c
THE PRIMARY MORTGAGE ON A HOME IS CALLED THE: FIRST MORTGAGE.
PRIMARY MORTGAGE IS THE INITIAL MORTGAGE DONE BY THE OWNER OF HOME.
19) $56.73
Therefore the difference between the two interest rates is: $612.09 - $555.36=$56.73
20) c.
an additional cost of financing
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