Question

True or​ False:  Annuities are unequal cash flows that go on for a finite period of time.

True or​ False:  We can determine which​ “PMT” we’re being asked to solve for by noting what the problem provides in terms of r and n.

True or​ False: ​ "When given the annual withdrawals desired during the retirement​ period, the FVA tells us the amount we should have accumulated by the time we begin the retirement period.

True or​ False:  Given the amount needed at the beginning of the retirement​ period, the annual deposits needed during the working period can be found by solving for​ “PMT” in the FVA formula.

True or​ False: ​ “PMT" in the PVA formula tells us the periodic mortgage payments for a​ fixed-rate fully amortized loan.

True or​ False:  The principal part of a fixed mortgage loan payment can be found by multiplying the periodic interest rate by the ending balance for a given period.

True or​ False: For​ fixed-rate fully amortized mortgage​ loans, more of the fixed payment goes towards principal as we approach the end of the loan term.

True or​ False:  We can find the amount needed to pay off a​ fixed-rate fully amortized mortgage loan at any point in time by solving for the PV of the remaining payments.

Present value. A​ smooth-talking used-car salesman who smiles considerably is offering you a great deal on a​ "pre-owned" car. He​ says, "For only 77 annual payments of $2,8002,800​, this beautiful 1998 Honda Civic can be​ yours." If you can borrow money at 88​%, what is the price of this​ car? Assume the payment is made at the end of each year.