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Which one of the following statements related to annuities and perpetuities is correct?

A perpetuity comprised of $100 monthly payments is worth more than an annuity comprised of $100 monthly payments, given an interest rate of 12 percent, compounded monthly

You are comparing two annuities which offer quarterly payments of $2,500 for five years and pay 0.75 percent interest per month. Annuity A will pay you on the first of each month while annuity B will pay you on the last day of each month. Which one of the following statements is correct concerning these two annuities?

Annuity B has a smaller present value than annuity A

You are comparing two investment options that each pay 5 percent interest, compounded annually. Both options will provide you with $12,000 of income. Option A pays three annual payments starting with $2,000 the first year followed by two annual payments of $5,000 each. Option B pays three annual payments of $4,000 each. Which one of the following statements is correct given these two investment options?

Option B has a higher present value at time zero than does option A.

Which one of the following terms is used to describe a loan wherein each payment is equal in amount and includes both interest and principal?

Which one of the following terms is defined as a loan wherein the regular payments, including both interest and principal amounts, are insufficient to retire the entire loan amount, which then must be repaid in one lump sum?

What is the interest rate charged per period multiplied by the number of periods per year called?

annual percentage rate

Which one of the following terms is used to identify a British perpetuity?

consol

A monthly interest rate expressed as an annual rate would be an example of which one of the following rates?

effective annual rate

An ordinary annuity is best defined by which one of the following

equal payments paid at regular intervals over a stated time period

Which one of the following terms is used to describe a loan that calls for periodic interest payments and a lump sum principal payment?

interest-only loan

A loan where the borrower receives money today and repays a single lump sum on a future date is called a(n) _____ loan.

pure discount

The interest rate that is quoted by a lender is referred to as which one of the following?

stated interest rate

Which one of the following accurately defines a perpetuity?

unending equal payments paid at equal time intervals