NEW
Font size
WorksheetsMBF 100/101: Identifying Annuities
Total questions: 9
Worksheet time: 41mins
Which key words show if an annuity is Simple or General?
If payments are made at the beginning of the period it is simple, if payments are at the end it is General
If payments per year (pp) are equal to compounding per year (cp) it is Simple, otherwise it is General.
(Ie, cp=pp is Simple, cp =/= pp is General.
If Payments are being made it is Simple, if there are no payments being made it is General.
There's no way of knowing, math is a mystery.
How do we know we are looking at an Annuity question?
You are making regular payments
Interest is compounded
i2=i
A number has been changed by a certain %
What key words tell us if an annuity is Ordinary or Due?
If payments are made at the end of a period it is Ordinary, if they are at the beginning it is annuity Due.
If payments per year (pp) are equal to compounding per year (cp) it is Ordinary, if they are not equal it is Due.
(ie, cp=pp is Ordinary, cp=/=pp is Due).
If you are making regular payments it is Ordinary, if there are not payments it is Due
Flip a coin and hope for the best
If you invest $100 at the end of every quarter, what kind of annuity are you looking at?
General
Simple
Ordinary
Due
If a pension plan pays you $30,000 at the beginning of every year, what kind of annuity is it?
Simple
General
Ordinary
Due
If you invest every month at a rate 1.4% every month, what kind of annuity is it?
Simple
General
Ordinary
Due
If you win the lottery and receive $50,000 every month at a rate of 0.2% compounded every year, what kind of annuity is it?
Simple
General
Ordinary
Due
You invest $300 into your bank every month for 3 years. It grows at a rate of 2% compounded every month. What kind of annuity is this?
Simple Ordinary Annuity
Simple Annuity Due
General Ordinary Annuity
General Annuity Due
If you receive $1500 interest revenue at the end of every quarter and interest is 6% compounded every quarter, what kind of annuity is it?
Simple Ordinary Annuity
Simple Annuity Due
General Ordinary Annuity
General Annuity Due
