Question
In: Finance
If you pay off a loan early, you must also pay all the remaining interest payments...
If you pay off a loan early, you must also pay all the remaining interest payments along with the loan balance.
Group of answer choices
True
False.
Which of the following is correct?
Group of answer choices
Present values increase with a longer compounding period.
Present values increase with a higher interest rate.
Future values increase with a lower interest rate.
Future values increase with a longer compounding period.
3.
What does it mean when you see the message Error 5 on your Texas Instruments financial calculator when using its TVM keys?
Group of answer choices
You made a mistake when using the TVM keys.
There is a problem with your calculator.
It is time to change the calculator’s battery.
Error 5 is the real answer.
Which one of the following cannot be computed?
Group of answer choices
Present value of a perpetuity.
Future value of a perpetuity.
Future value of an annuity.
Present value of an annuity.
Solutions
Expert Solution
Question: If you pay off a loan early, you must also pay all the remaining interest payments along with the loan balance.
Answer: False. There is no need to pay the remaining interest payments; Only the accrued and un-paid interest need to be paid to pay off the loan early to clear off all the outstanding balances.
Question: Which of the following is correct?
Answer: Future values increase with a longer compounding period. Compounding is a method by which the interest is calculated on both the Principal portion as well as the accumulated interest portion; Hence, the future value increases with the longer compounding period.
Question: 3. What does it mean when you see the message Error 5 on your Texas Instruments financial calculator when using its TVM keys?
Answer: You made a mistake when using the TVM keys. This Error gets triggered when there is no value for the inputs made.
Question: Which one of the following cannot be computed?
Answer: Future value of a perpetuity. In this case, the future cash flows / values are expected perpetually and hence the same cannot be able to computed.
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