Which of the Following Statements Is CORRECT

question 33

Multiple Choice

Which of the following statements is CORRECT?

• A) The present value of a 3-year,$150 ordinary annuity will exceed the present value of a 3-year,$150 annuity due.
• B) If a loan has a nominal annual rate of 8%,then the effective rate will never be less than 8%.
• C) If a loan or investment has annual payments,then the effective,periodic,and nominal rates of interest will all be different.
• D) The proportion of the payment that goes toward interest on a fully amortized loan increases over time.
• E) An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.

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Definitions:

Autokinetic Illusion

A visual perception phenomenon where a static light in a dark room appears to move because of small involuntary eye movements.

Tiny

A term used to describe something that is very small in size.

Constantly Shining Light

A continuous and uninterrupted emission of light from a source.

Monaural Clues

Auditory signals that can be perceived by one ear, helping in sound localization and identification.