Perpetuities (VCE SSCE General Mathematics): Quizzes
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Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What is the key characteristic of a perpetuity?
What is the key characteristic of a perpetuity?
Payments equal the interest earned
What type of loan do perpetuities relate to in the same way annuities relate to reducing balance loans?
What type of loan do perpetuities relate to in the same way annuities relate to reducing balance loans?
Interest-only loans
What happens to the value of a perpetuity over time?
What happens to the value of a perpetuity over time?
It remains constant
What is the key formula for perpetuity payments?
What is the key formula for perpetuity payments?
In the perpetuity formula, what does represent?
In the perpetuity formula, what does represent?
Compounding periods per year
In the perpetuity formula, what does represent?
In the perpetuity formula, what does represent?
Regular payment per compounding period
What monthly payment comes from 500,000 USD at 6% p.a. compounding monthly?
What monthly payment comes from 500,000 USD at 6% p.a. compounding monthly?
2,500 USD
How much must be invested at 4.8% p.a. monthly to withdraw 300 USD monthly?
How much must be invested at 4.8% p.a. monthly to withdraw 300 USD monthly?
75,000 USD
What interest rate allows 30,000 USD to pay 1,500 USD annually indefinitely?
What interest rate allows 30,000 USD to pay 1,500 USD annually indefinitely?
5%
What three factors does the perpetuity payment depend on?
What three factors does the perpetuity payment depend on?
Interest rate, compounding freq, initial $