MC 108 - MODULE 4

What does the notation 𝑆∗ represent in annuity calculations?

• Present value of an ordinary annuity

• Sum of an annuity due

• Periodic payment

• Term of an annuity

Which notation represents the number of conversion periods per year?

• 𝑛

• 𝑚

• 𝑟

• 𝑖

What is the formula for the periodic rate 𝑖?

• 𝑖 = 𝑟 × 𝑚

• 𝑖 = 𝑟 / 𝑚

• 𝑖 = 𝑚 / 𝑟

• 𝑖 = 𝑟 + 𝑚

What is the formula for the amount of an annuity due?

• 𝑆∗ = 𝑅 [(1+𝑖)^𝑛 − 1 / 𝑖]

• 𝑆∗ = 𝑅 [(1+𝑖)^(𝑛+1) − 1 / 𝑖 − 1]

• 𝑆∗ = 𝑅 [(1+𝑖)^𝑛 / 𝑖]

• 𝑆∗ = 𝑅 [(1+𝑖)^(𝑛−1) / 𝑖]

If 𝑅 = ₱1,000, 𝑟 = 8%, 𝑚 = 4, and 𝑡 = 5 years, what is 𝑛?

• 5

• 10

• 20

• 40

What is the amount of an annuity due if 𝑅 = ₱1,000, 𝑖 = 0.02, and 𝑛 = 10?

• ₱10,000

• ₱11,168.72

• ₱12,189.94

• ₱13,412.09

What is the formula for the present value of an annuity due?

• 𝐴∗ = 𝑅 [(1−(1+𝑖)^(−𝑛)) / 𝑖]

• 𝐴∗ = 𝑅 [(1−(1+𝑖)^(1−𝑛)) / 𝑖 + 1]

• 𝐴∗ = 𝑅 [(1−(1+𝑖)^(−𝑛)) / 𝑖 − 1]

• 𝐴∗ = 𝑅 [(1−(1+𝑖)^(1−𝑛)) / 𝑖]

If 𝑅 = ₱5,000, 𝑟 = 6%, 𝑚 = 2, and 𝑡 = 3 years, what is 𝑖?

• 0.03

• 0.06

• 0.12

• 0.18

What is the present value of an annuity due if 𝑅 = ₱2,000, 𝑖 = 0.05, and 𝑛 = 8?

• ₱13,863.22

• ₱14,557.38

• ₱15,000.00

• ₱16,210.34

What is the formula for the periodic payment 𝑅 if the present value 𝐴∗ is given?

• 𝑅 = [𝐴∗ 𝑖 / (1+𝑖)^(𝑛+1) − (1+𝑖)]

• 𝑅 = [𝐴∗ 𝑖 / (1+𝑖) − (1+𝑖)^(1−𝑛)]

• 𝑅 = [𝐴∗ 𝑖 / (1+𝑖)^(𝑛) − 1]

• 𝑅 = [𝐴∗ 𝑖 / (1+𝑖)^(𝑛) − (1+𝑖)]