if a loan of 10,000 is amortized in equal annual payments for 6 years at 12%, the payments are: a)…

if a loan of 10,000 is amortized in equal annual payments for 6 years at 12%, the payments are: a) increasing b) equal c) decreasing d) random in annuity problems, a usually denotes: a) accumulated interest b) periodic payment c) annual interest d) amount of arrears in ordinary annuity, interest accumulates: a) before first payment b) after each payment c) irrespective of time d) none of the above if payments are delayed for some time before starting, the annuity is called: a) ordinary annuity b) annuity due c) deferred annuity d) simple annuity

if a loan of 10,000 is amortized in equal annual payments for 6 years at 12%, the payments are: a) increasing b) equal c) decreasing d) random in annuity problems, a usually denotes: a) accumulated interest b) periodic payment c) annual interest d) amount of arrears in ordinary annuity, interest accumulates: a) before first payment b) after each payment c) irrespective of time d) none of the above if payments are delayed for some time before starting, the annuity is called: a) ordinary annuity b) annuity due c) deferred annuity d) simple annuity

Answer

  1. First question:
    • Brief Explanation: An annuity that is delayed for some time before starting is called a deferred annuity. In a simple annuity, payments and interest - conversion periods coincide. An ordinary annuity has payments at the end of the period and an annuity due has payments at the start of the period.
    • Answer: c) Deferred annuity
  2. Second question:
    • Brief Explanation: In an ordinary annuity, interest accumulates after each payment. Before the first payment, there is no interest accumulation from annuity payments.
    • Answer: b) After each payment
  3. Third question:
    • Brief Explanation: In annuity problems, accumulated interest refers to the total interest that has built - up over time due to compounding of periodic payments.
    • Answer: d) Accumulated interest
  4. Fourth question:
    • Brief Explanation: When a loan of 10000 is amortized in equal annual payments for 6 years at 12%, the payments are equal. Amortization involves paying off a debt in regular equal installments that cover both principal and interest over time.
    • Answer: b) Equal

Format used: Answer - Explanation Format