Topic 2 Flashcards
1
Q
The difference between simple and compound interest is:
A
The compound interest includes the interests generated in each period for the following periods.
2
Q
The discount factor is the present value of an investment that produces EUR1 in ānā years
A
TRUE
3
Q
Annuity is a stream of equally spaced payments, increasing over time, at a given rate for a period of time. This period of time can be infinite.
A
TRUE
4
Q
The loans with constant annuities pay more interests at the beginning of its life than at the end
A
TRUE
5
Q
The loans with fixed payments of principal pay constant interest in each annuity;
A
FALSE; they pay decreasing interest.
