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This activity contains 10 questions.
Which annuity has an interest compounding period that is an equal to the payment interval?An ordinary simple annuity has the following characteristics: Payments are made at the end of the payment intervals, and the payment and compounding frequencies are equal. The first payment occurs one interval after the beginning of the annuity.
Is an annuity where the payment dates do not coincide with the interest conversion periods?A simple annuity is an annuity in which the conversion period and the payment interval do not coincide.
Is a sequence of payments made at equal intervals or period of time?A sequence of equal payments made at equal periods of time is called an annuity.
What is general annuity?A general annuity is an annuity where the payments do not coincide with the interest periods. You will be able to see that it is very easy to deal with general annuities once an equivalent interest rate is determined with that equivalent rate being compounded as often as the payments are made.
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