Mathematics · Financial Mathematics
A borrower is comparing the cost of a rental agreement structured as an Annuity Due versus an Ordinary Annuity. Assume both have 12 monthly payments of ₹1,000 and an interest rate of 1% per month. Statement 1: The Present Value of an Annuity Due will be higher than the Present Value of an Ordinary Annuity. Statement 2: The difference in the present values is equal to the present value of the final payment, discounted for one period. Which of the following is correct regarding these statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Both statements are incorrect
- 2Both statements are correct
- 3Statement 1 is incorrect, and Statement 2 is correct
- 4Statement 1 is correct, and Statement 2 is incorrect✓
Correct answer
Statement 1 is correct, and Statement 2 is incorrect
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Mathematics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Financial Mathematics MCQs →Want more practice questions on Financial Mathematics?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Mathematics · Financial Mathematics