Trure/False 1-The present value of an annuity is equal to the sum of the individ
ID: 2596184 • Letter: T
Question
Trure/False
1-The present value of an annuity is equal to the sum of the individual future values for each payment.
2-The factor for the present value of an annuity at 8% for 10 years is 6.7101. This implies that an annuity of ten $15,000 payments at 8% yields a present value of $2,235.
3-If a credit card sale is made, the seller debits Cash and credits Sales for the same amount.
) A company receives a 10%, 120-day note for $1,500. The total interest due on the maturity date is: (Use 360 days a year.)
A) $50.00.
B) $150.00.
C) $75.00.
D) $37.50.
E) $87.50
Explanation / Answer
Question (3)
Answer: False , because to record this transaction seller debits the cash, credit card expense accounts and credit the sales with the total of cash & credit card expense.
Question (4)
Answer: Option (A) $50.00
Here is some computation:
Total interest due on the maturity date = 1,500 × 10%× 120/360 = $50