BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
A series of payments is made for annuities.
|
|
|
Compound interest investments are for a shorter time period.
|
|
|
The cash value of annuities can be figured using the compound interest table.
|
|
|
Annuities involve a series of payments of usually differing amounts, whereas compound investments involve regular contributions of equal amounts.
|
Detailed explanation-1: -The cash value of annuities can be figured using the compound interest table. Annuities involve a series of payments of usually differing amounts, whereas compound investments involve regular contributions of equal amounts.
Detailed explanation-2: -Annuities assume that you put money in the account on a regular schedule (every month, year, quarter, etc.) and let it sit there earning interest. Compound interest assumes that you put money in the account once and let it sit there earning interest.
Detailed explanation-3: -Annuities have no contribution limits and provide a guarantee on investment, principal protection, and a guaranteed income for life. Other investments have no guarantee on investment and can lose money and no guarantee of income in retirement.
Detailed explanation-4: -A fixed annuity guarantees payment of a set amount for the term of the agreement. It can’t go down (or up). A variable annuity fluctuates with the returns on the mutual funds it is invested in. Its value can go up (or down).
Detailed explanation-5: -An ordinary general annuity has the following characteristics: Payments are made at the end of the payment intervals, and the payment and compounding frequencies are unequal. The first payment occurs one interval after the beginning of the annuity.