Answer the True or False Questions Based on Interests
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True or False
- True or false. When simple interest is used, the accumulated amount is a linear function of time.
- True or false. Compound interest that is converted once a year is the same as simple interest.
- True or false. If interest is compounded annually, then the effective rate of interest is the same as the nominal rate of interest.
- True or false. The present value is always smaller than the future value.
- True or false. The future value of an annuity can be found by adding together all the payments that are paid into an account.
- True or false. The periodic payment R where
and P is the loan amount and i is the interest per period that will amortize the loan at the end of the term comprising n periods. - True or false. A sinking fund is the accumulated amount to be realized at some future date (the end of the term) when a fixed number of periodic payments are paid into an account earning interest at the rate of i per period.
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