Financial Management - Study Mode
[#896] If payment of security is paid as Rs 100 at end of year for three years, it is an example of
Correct Answer
(D) annuity
Explanation
Solution: If payment of security is paid as Rs 100 at end of year for three years, it is an example of annuity. An annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments and, in return, obtain regular disbursements beginning either immediately or at some point in the future.
[#897] Payment of security if it is made at end of each period such as beginning of year is classified as
Correct Answer
(A) annuity due
Explanation
Solution: Payment of security if it is made at end of each period such as beginning of year is classified as annuity due. An annuity due is a repeating payment that is made at the beginning of each period, such as a rent payment.
[#898] Net worth is also called
Correct Answer
(A) asset net of liabilities
Explanation
Solution: Net worth is also called asset net of liabilities. Net worth is the value of all the non-financial and financial assets owned by an institutional unit or sector minus the value of all its outstanding liabilities.
[#899] An annual rate of 16% if quoted by credit card issuer usually a bank is classified as
Correct Answer
(C) annual percentage rate
Explanation
Solution: An annual rate of 16% if quoted by credit card issuer usually a bank is classified as annual percentage rate. An annual percentage rate (APR) is the annual rate charged for borrowing or earned through an investment. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan.
[#900] Value of payment is Rs 25 and an interest rate is 2%, then present value will be
Correct Answer
(C) Rs 12,504.00