True of annuities, Which of the following is true of

True of annuities

Assignment Help Financial Management

Reference no: EM131842451

1. Which of the following is true of annuities?

a. An ordinary annuity is an equal payment paid or received at the beginning of each period.

b. An annuity due is an equal stream of cash flows is paid or received at the beginning of each period.

c. An annuity due is a payment paid or received at the beginning of each period that increases by an equal amount each period.

d. An ordinary annuity is an equal payment paid or received at the end of each period that increases by an equal amount each period.

2. Your uncle has $415,000 and wants to retire. He expects to live for another 25 years and to earn 7.5% on his invested funds. How much could he withdraw at the end of each of the next 25 years and end up with zero in the account?

a. $45,048.21

b. $37,229.93

c. $29,783.94

d. $45,420.51

e. $40,952.92

Reference no: EM131842451

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