If an Annuity Due and an Ordinary Annuity Have the Same

question 15

Multiple Choice

If an annuity due and an ordinary annuity have the same number of equal payments and the same interest rates, then

• A) the present value of the annuity due is less than the present value of the ordinary annuity.
• B) the present value of the annuity due is greater than the present value of the ordinary annuity.
• C) the future value of the annuity due is equal to the future value of the ordinary annuity.
• D) the future value of the annuity due is less than the future value of the ordinary annuity.

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Required Reserve Ratio

The fraction of deposits that banks are required by law to keep on hand as reserves, either in their vaults or at a central bank.

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