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Given the following situations, illustrate and distinguish whether it is simple annuity or general annuity.
1. Monthly payments of P3,000 for 4 years with interest rate of 36 compounded monthly.
2. Semi-annual payments of P150,000 with intrest rate of 8% compounded annually for 10 years.
3. Annual payments of P20.500 with interest rate of 8.5% compounded semi-annually for 3 years.
4. Quarterly payment of P5,000 for 10 years with interest rate of 2% compounded quarterly,
5. Quarterly payment of P15,000 for 10 years with interest rate of 8% compounded annually.
How do you determine if it is simple or general annuity?
The main difference is that in a simple annuity the payment interval is the same as the interest period while in a general annuity the payment interval is not the same as the interest period.
Step-by-step explanation:
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