When the Contract Rate of Interest Is Greater Than the Market

question 67

True/False

When the contract rate of interest is greater than the market rate of interest the issuer will record a premium on bonds payable.

---

Definitions:

Ordinary Annuity

A series of equal payments made at regular intervals (e.g., monthly or annually) with interest compounded at the end of each period.

Deferred Annuity

An insurance product that delays payments until the investor elects to receive them, often at retirement.

Ordinary Annuity

An investment that makes equal periodic payments for a fixed period of time.

Deferred Annuity

An insurance product that provides future payments to the holder, starting at a pre-specified date, often used as a long-term retirement savings vehicle.