WorksheetsAnnuity
Total questions: 15
Worksheet time: 8mins
__________ is a cash flow payment which continues indefinitely
Annuity
Perpetuity
Sinking Fund
All of the above
What is the main difference between an annuity and a compound interest investment?
A series of payments is made for annuities.
A series of payments is made for annuities.
The cash value of annuities can be figured using the compound interest table.
Annuities involve a series of payments of usually differing amounts, whereas compound investments involve regular contributions of equal amounts.
When is payment made on an ordinary annuity?
Beginning of the period
Middle of the period
End of the period
First 3 days of the period
When is payment made on an annuity due?
Beginning of the Period
First 3 days of the period
Middle of the period
End of the period
(a) is a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future.
What is the main difference between an annuity and a compound interest investment?
A series of payments is made for annuities.
Annuities involve a series of payments of usually differing amounts, whereas compound investments involve regular contributions of equal amounts.
The cash value of annuities can be figured using the compound interest table.
Compound interest investments are for a shorter time period.
The amount of an annuity payment is based upon which of the following factors?
Starting principal
Income period
Interest
All of the above
Before the payout period begins, the annuity is in the
Premium phase
Accumulation phase
Collection phase
None of the choices
The principal reason for investing in annuities is:
to create an estate
to leave an inheritance
as a retirement tool
All of the above
Since there is no possibility of loss, the insurer bears the burden of risk in a fixed annuity
True
False
A ___________ is an insurance contract that pays a guaranteed rate of interest on the owner's contributions and later provides a guaranteed income.
Fixed Annuity
Variable Annuity
Contingent Annuity
None of the choices
The formula for the Present Value of annuity is: = A (( 1+i)^n - 1)/i; where A is the periodic payment
True
False
In computing the future value of annuity, the formula is A((1 - ( 1+i)^-n)/i
True
False
Timothy joined a cooperative by depositing Php 14,500 at the end of each year for four years. Interest is 10% compounded annually. What is the value of Timothy's annuity at the end of 4 years
67,294.00
67,295.50
67,294.50
67,295
Jonathan wants to received a Php 100,000 annuity in 3 years. Interest on the annuity in 3 years. Interest on the annuity is 8% annually. Jonathan will make withdrawals at the end of each year. How much must Jonathan invest today to receive the stream of payments for 3 years
257,708.00
257,708.70
257,709.00
257,709.70
