econ ch2

Question 1

is a series of equal payments made at equal interval of time

Answer 1

annuity

Question 2

types of annuity

Answer 2

1. ordinary annuity
2. deferred annuity
3. annuity due
4. perpetuity

Question 3

is one where the payments are made at the end of each payments

Answer 3

ordinary annuity

Question 4

Is an annuity whose first payment is deferred to a certain number of period.

Answer 4

deferred annuity

Question 5

Is an annuity whose first payment is made at the start of each period.

Answer 5

annuity due

Question 6

is an annuity whose payment periods continues indefinitely

Answer 6

perpetuity

Question 7

is simply the sum of the first cost and the present worth of all costs of replacement, operation and maintenance on a certain periods or forever). This is an important application of annuity.

Answer 7

capitalized cost

Question 8

any method of repaying a debt, including the principal and interest and is usually by a series of equal payments at equal interval of time.

Answer 8

amortization

Question 9

is an instance where the disbursement or receipts involves is uniformly increasing or decreasing amount on each period)

Answer 9

uniform arithmetic gradient