Ch BDetermine which of the statements below is correct regarding the present value concept.

Determine which of the statements below is correct regarding the present value of an ordinary annuity.

The present value of an annuity is the amount that can be invested now at the specified rate to yield a future series of equal periodic payments.

The three factors used in a future value table include all of the following except:

present value

Show your understanding of how "periods" can be expressed in time value of money computations by selecting the correct statements below. (Check all that apply.)

-Periods can be expressed in one-month periods. -Periods represent the number of times that interest is compounded within one year. -Periods must equal one year or less.

Explain what future and present value computations enable us to do by selecting all of the correct statements below. (Check all that apply.)

-The future value computation is important when we want to know the value of present-day assets at a future date. -The present value computation is important when we want to know the value of future-day assets today. -They enable us to measure or estimate the interest component of holding assets or debt over time.

Identify the required components needed to determine the present value of a sum. (Check all that apply.)

-The number of periods the sum will be earning interest -The interest rate charged -The future amount of money needed

Determine which of the statements below is correct regarding the present value concept.

We want to know how much we must invest now in order to have a certain sum of money some time in the future.