A specific present value of an ordinary annuity factor for a given number of periods and a specific discount rate is equal to the cumulative sum of the present value of single sum factors over the given number of periods for that discount rate. 1. True2. False

Question

Janessa Cantu

Business

18 January, 09:47

A specific present value of an ordinary annuity factor for a given number of periods and a specific discount rate is equal to the cumulative sum of the present value of single sum factors over the given number of periods for that discount rate. 1. True2. False

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Answers (1)

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Irvin Oconnell · Answer 1

True

Explanation:

This is true because if we add all the discounts factor of a particular rate 10% (suppose) for 10 years (suppose). Then the sum will be equal to the annuity factor at 10 years time. This is what the statement is saying above so it is 110% true.