Question

Consider these statements about annuities and perpetuities and decide which is accurate. Group of answer choices The future value of a perpetuity can be computed using low discount rates.. A perpetuity comprised of $200 monthly payments is worth more than an annuity comprised of $200 monthly payments, given an interest rate of 12 percent, compounded monthly. Most business loans are a form of an amortized loan. An ordinary annuity is worth more than an annuity due given equal annual cash flows for eleven years at 8 percent interest, compounded annually.

Answer 1

The accurate statements on annuities and perpetuities are:

• A perpetuity comprised of $200 monthly payments is worth more than an annuity comprised of $200 monthly payments, given an interest rate of 12 percent, compounded monthly.
• Most business loans are a form of an amortized loan.

What is true of annuities and perpetuities?

A perpertuity's present value is:

= Amount / periodic rate

= 200 / (12% / 12 months)

= $20,000

This is larger than the present value of an annuity of the same amount if the payment period is not long.

Business loans come as amortized loans for the most part because the business will have to pay back a specific amount every period that includes interest and principal repayment.

Find out more on perpetuities at https://brainly.com/question/24261067.

#SPJ12