Listed below are some of the advantages and disadvantages of a fixed-term annuity. Choose the one statement that is false. The payment from an annuity is fixed. So one can plan easily knowing the amount of the payment. An annuity's payments include both interest and part of the principal of the initial deposit. An annuity's payments represent the interest on the initial deposit. The annuity will never expire. If one lives longer than the term of the annuity, the payments will stop, and one would need to budget to replace those dollars.

Listed below are some of the advantages and disadvantages of a fixed-term annuity. Choose the one statement that is false. The payment from an annuity is fixed. So one can plan easily knowing the amount of the payment. An annuity's payments include both interest and part of the principal of the initial deposit. An annuity's payments represent the interest on the initial deposit. The annuity will never expire. If one lives longer than the term of the annuity, the payments will stop, and one would need to budget to replace those dollars.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 3QTD

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In comparing an ordinary annuity and an annuity due, which of the following is true? a. The future value of an annuity due is always less than the future value of an otherwise identical ordinary annuity, since one less payment is received with an annuity due. b. The future value of an annuity due is always greater than the future value of an otherwise identical ordinary annuity. c. The future value of an ordinary annuity is always greater than the future value of an otherwise identical annuity due.
May I ask for an explanation of the question for a better understanding. Thank you! Which of the following statements is NOT TRUE? a. In an annuity due, payments occur at the beginning of the period. b. A perpetuity will never mature at any point in future. c. The present value of a perpetuity can be calculated. d. In an ordinary annuity, payments occur at the beginning of the period.
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