Which Is NOT Correct Regarding an Ordinary Annuity and Annuity

question 52

Multiple Choice

Which is NOT correct regarding an ordinary annuity and annuity due?

• A) An annuity is a series of equal payments.
• B) The present value of an ordinary annuity is less than the present value of an annuity due (assuming interest rate is positive).
• C) As the interest rate increases, the present value of an annuity decreases.
• D) As the length of the annuity increases, the future value of the annuity decreases.

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Definitions:

Civil War

A conflict between citizens of the same country. In the United States, it refers specifically to the war fought from 1861 to 1865 over issues including states' rights and slavery.

Deaths

The end of life in biological organisms, marking the permanent cessation of vital functions and processes.

Johnson Act

A U.S. law enacted in 1934, limiting the ability of individuals and entities within the United States to loan money or extend credit to nations in default on their debts to U.S. citizens.

Foreign Governments

The governing bodies or administrative authorities of countries other than one's own, involved in international relations and diplomacy.