Multiple Choice
Which of the following is false?
A) The future value of a deferred annuity is the same as the future value of an annuity not deferred.
B) A deferred annuity is an annuity in which the rents begin after a specified number of periods.
C) To compute the present value of a deferred annuity, we compute the present value of an ordinary annuity of 1 for the entire period and subtract the present value of the rents which were not received during the deferral period.
D) If the first rent is received at the end of the sixth period, it means the ordinary annuity is deferred for six periods.
Correct Answer:
Verified
Correct Answer:
Verified
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