Question

1.In using the table method of calculating present value, we may not get the same answer as if we used the formula method. T F

2.An annuity can be defined as a series of payments occurring at equal intervals T F

3.The future value of an annuity can be defined as the accumulated value of each annuity payment with interest as of the date of the final payment. T F

Answer 1

1. The given statement is FALSE as when we are calculating either through the table method or the formula method, the present value result would be similar.

2. The given statement is TRUE as annuity will be the series of payment occurring at equal intervals and they will also have equal payment.

3. The given statement is TRUE as the future value of an annuity can be defined as accumulated value of each annuity payment and it will also include the interest rate on these payments and they will be calculated on the date of the final payment.