What is the type of annuity where the first payment does not begin until some later date in the cash flow ?

Related Mcqs:

1. What is the type of annuity that does not have a fixed time span but continues indefinitely or forever ?

   A. Ordinary annuity
   B. Perpetuity
   C. Annuity due
   D. Deferred annuity

2. What is the type of annuity where the payments are made at the beginning of the each period starting from the first period ?

   A. Ordinary annuity
   B. Perpetuity
   C. Annuity due
   D. Deferred annuity

3. What is the type of annuity where the payments are made at the end of each period starting from the first period ?

   A. Ordinary annuity
   B. Perpetuity
   C. Annuity due
   D. Deferred annuity

4. A investor wishes to earn 7% on his capital after payment of taxes. If the income from an available investment will be taxed at an average rate of 42%, what minimum rate of return, before payment of taxes, must the investment offer to be justified ?

   A. 12.07 %
   B. 12.34 %
   C. 12.67 %
   D. 12.87 %

5. A factory operator bought a diesel generator set for P 10,000.00 and agreed to pay the dealer uniform sum at the end of each year for 5 years at 8% interest compounded annually, that the final payment will cancel the debt for principal and interest. What is the annual payment ?

   A. P 2,500.57
   B. P 2,544.45
   C. P 2,540.56
   D. P 2,504.57

6. Which is NOT an essential element of an ordinary annuity ?

   A. The amounts of all payments are equal.
   B. The payments are made at equal interval of time.
   C. The first payment is made at the beginning of the first period.
   D. Compound interest is paid on all amounts in the annuity.

7. What is the term for an annuity with a fixed time span ?

   A. Ordinary annuity
   B. Perpetuity
   C. Annuity certain
   D. Annuity due

8. What is the present worth of a P500 annuity starting at the end of the third year and continuing to the end of the fourth year, if the annual interest rate is 10 % ?

   A. P 727.17
   B. P 717.17
   C. P 714.71
   D. P 731.17

9. What annuity is required over 12 years to equate with a future amount of P 20,000? Assume i= 6% annually ?

   A. P 1,290.34
   B. P 1,185.54
   C. P 1,107.34
   D. P 1,205.74

10. A mathematical expression also known as the present value of annuity of one is called ____________________?

    A. Load factor
    B. Demand factor
    C. Sinking fund factor
    D. Present worth factor