In Case of Supplementary Contracts, the Amount of Each Payment

question 162

Multiple Choice

In case of supplementary contracts, the amount of each payment is computed on the basis of the assumed (or guaranteed) interest rate and the number and frequency of payments selected. For example:

• A) The higher the assumed interest rate, the larger the amount of each payment
• B) The lower the assumed interest rate, the larger the amount of each payment
• C) The higher the assumed interest rate, the smaller the amount of each payment
• D) The higher the actual interest rate, the larger the amount of each payment

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Definitions:

Saving Rate

The proportion of disposable income that is saved by individuals or households in an economy rather than spent.

Income Growth

An increase in the amount of money earned by individuals, households, or a country over time.

Productivity Growth

An increase in the efficiency of production, often measured by the ratio of output to inputs in the production process over time.

Produce Goods

The process of creating, manufacturing, or growing products intended for consumption or use.