Which of the following is false?
A) To calculate the present value of a deferred annuity, determine the present value of an ordinary annuity for the entire period and subtract the present value of the payments which were not received during the deferral period.
B) The future value of a deferred annuity is equal to the future value of an annuity not deferred.
C) If the first payment is received at the end of the fifth period, it means the ordinary annuity is deferred for five periods.
D) The present value of a deferred annuity is less than the present value of an annuity not deferred.

Question

Quizplus · Accepted Answer

The statement in C is false because if the first payment is received at the end of the fifth period, the ordinary annuity is deferred for four periods, not five.

Which of the Following Is False