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Vika [28.1K]
2 years ago
10

Which of the following statements is true? Select one: a. In an annuity due payments occur at the end of the period. b. In an or

dinary annuity payments occur at the end of the period. c. A perpetuity will mature at some point in the future. d. One cannot calculate the present value of a perpetuity.
Business
1 answer:
pashok25 [27]2 years ago
5 0

Answer:

b. In an ordinary annuity payments occur at the end of the period

Explanation:

<u>Why the other options are false:</u>

A.- On annuity due, the payment occurs at the beginning of the period.

B.- The perpetuity will not mature. It will yield interest for an indefinite period of time

C.- The present present value of a perpetuity is calculate as follow:

cash inflow/ interest rate = perpetuity

On an ordinary annuity, the payment occur at the end of the period, which is correct.

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