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1. True or false. When simple interest is used, the accumulated amount is a linear function
of time.
2. True or false. Compound interest that is converted once a year is the same as simple
interest.
3. True or false. If interest is compounded annually, then the effective rate of interest is the
same as the nominal rate of interest.
4. True or false. The present value is always smaller than the future value.
5. True or false. The future value of an annuity can be found by adding together all the
payments that are paid into an account.
6. True or false. The periodic payment R where
and P is the loan amount
and i is the interest per period that will amortize the loan at the end of the term
comprising n periods.
7. True or false. A sinking fund is the accumulated amount to be realized at some future
date (the end of the term) when a fixed number of periodic payments are paid into an
account earning interest at the rate of i per period.
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MAT222-Week2- Aleks Homework
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