An annuity is a series of equal payments occuring at equal time intervals, and this amount includes the sum of all payments plus interest, if allowed to accumulate at a definite rate of interest from the time of initial payment to the end of annuity term. Ordinary annuity is used in the calculation of the__________________?

Related Mcqs:

1. A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as __________________?

   A. Perpetuity
   B. Capital charge factor
   C. Annuity
   D. Future worth

2. The amount of simple interest during ‘n’ interest period is (where, i = interest rate based on the length of one interest period, p = principal) ?

   A. p.i.n.
   B. p(1 + i.n)
   C. p(1 + i)n
   D. p(1 – i.n)

3. If an amount R is paid at the end of every year for ‘n’ years, then the net present value of the annuity at an interest rate of i is _________________?

   A. R [{(1 + i)n – 1}/ i ]
   B. R [{(1 + i)n – 1}/ i (1 + i)n]
   C. R(1 + i)n
   D. R/(1 + i)n

4. If ‘S’ is the amount available after ‘n’ interest periods for an initial principal ‘P’ with the discrete compound interest rate ‘i’, the present worth is given by__________________?

   A. (1 + i)n/S
   B. S/(1 + i)n
   C. S/(1 + in)
   D. S/(1 + n)i

5. ‘Utilities’ in a chemical process plant includes compressed air, steam, water, electrical power, oxygen, acetylene, fuel gases etc. Utility costs for ordinary chemical process plants ranges roughly from _______________ percent of the total product cost?

   A. 1 to 5
   B. 10 to 20
   C. 25 to 35
   D. 35 to 45

6. Fixed capital investment of a chemical plant is the total amount of money needed to supply the necessary plant and manufacturing facilities plus the working capital for operation of the facilities. Which of the following components of fixed capital investment requires minimum percentage of it ?

   A. Electrical installation cost
   B. Equipment installation cost
   C. Cost for piping
   D. Equipment insulation cost

7. A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs ?

   A. 121
   B. 110
   C. 97
   D. 91

8. ________________ of depreciation calculation does not take into account the interest on investments?

   A. Present worth method
   B. Sinking fund method
   C. Sum of the years-digits method
   D. All A, B. and C.

9. _________________ of depreciation calculation accounts for the interest on investment?

   A. Straight line method
   B. Declining balance
   C. Both A. and B.
   D. Neither A. nor B.

10. The amount of compounded interest during ‘n’ interest periods is_________________?

    A. p[(1+i)n – 1)]
    B. p(1 + i)n
    C. p(1 – i)n
    D. p(1 + in)