Which of the Following Statements Is CORRECT

question 30

Multiple Choice

Which of the following statements is CORRECT?

• A) The present value of a 3-year,$150 annuity due will exceed the present value of a 3-year,$150 ordinary annuity.
• B) If a loan has a nominal annual rate of 8%,then the effective rate can never be greater 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:

Age of Majority

The legally defined age at which an individual is considered an adult and is responsible for his or her actions and decisions.

Law of Infants

Legal provisions and protections specifically related to the rights and well-being of minors.

Torts

Legal wrongs committed against a person or property, excluding breach of contract, for which the law provides a remedy.

Guarantees

Promises or assurances, usually in writing, that certain conditions will be fulfilled, often relating to the quality or durability of a product or service.