Mathematics · Financial Mathematics

Based on the principles governing the Future Value and Present Value of annuities, identify the correct set of statements from the options below: Statement 1: The Future Value of an Annuity Due is always higher than that of an Ordinary Annuity for the same principal, rate, and time, provided the interest rate is positive. Statement 2: In an Ordinary Annuity of 10 years, the tenth and final payment does not earn any interest because it is paid at the very end of the term. Statement 3: If a person starts a monthly SIP on the 1st of every month, it should be treated as an Ordinary Annuity for calculation purposes. Statement 4: The factor used to convert an Ordinary Annuity into an Annuity Due is (1 + r), where r is the interest rate per period. Statement 5: As the compounding frequency increases, the difference in absolute terms between the Future Value of an Ordinary Annuity and an Annuity Due decreases. Statement 6: The Present Value of an Annuity Due is higher than the Present Value of an Ordinary Annuity under identical positive rate and time conditions. Statement 7: Depreciation is an example of an Annuity Due because it is calculated at the start of the year.