Question

A specific present value of an ordinary annuity factor for a given number of periods and a specific discount rate is equal to the cumulative sum of the present value of single sum factors over the given number of periods for that discount rate.1. True2. False

Answer 1

True

Step-by-step explanation:

This is true because if we add all the discounts factor of a particular rate 10% (suppose) for 10 years (suppose). Then the sum will be equal to the annuity factor at 10 years time. This is what the statement is saying above so it is 110% true.