Which of the following statements is most correct?
A) There is an inverse relation between the present value interest factor of an annuity and the future value interest factor of an annuity, i.e., one is the reciprocal of the other.
B) The future value of an ordinary annuity can be determined as the product of the annual payment and the appropriate future value interest factor for an ordinary annuity.
C) If a bank uses daily compounding for a savings account, the nominal rate (or APR) will be less than the effective annual rate.
D) If the bank uses monthly compounding the nominal rate (or APR) will be greater than if it compounded daily.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is most correct?
A) There is an inverse relation between the present value interest factor of an annuity and the future value interest factor of an annuity, i.e., one is the reciprocal of the other.
B) The future value of an ordinary annuity can be determined as the product of the annual payment and the appropriate future value interest factor for an ordinary annuity.
C) If a bank uses daily compounding for a savings account, the nominal rate (or APR) will be less than the effective annual rate.
D) If the bank uses monthly compounding the nominal rate (or APR) will be greater than if it compounded daily.

Which of the Following Statements Is Most Correct