Response to the following problem:
Question 1. Explain the difference between monetary and nonmonetary assets and liabilities.
Question 2. What is an annuity?
Question 3. Explain the difference between an ordinary annuity and an annuity due.
Question 4. Explain the relationship between Table , Present Value of $1, and Table , Present Value of an Ordinary Annuity of $1.
Question 5. Prepare a time diagram for the present value of a four-year ordinary annuity of $200. Assume an interest rate of 10% per year.
Question 6. Prepare a time diagram for the present value of a four-year annuity due of $200. Assume an interest rate of 10% per year.
Question 7. What is a deferred annuity?
Question 8. Assume that you borrowed $500 from a friend and promised to repay the loan in five equal annual installments beginning one year from today. Your friend wants to be reimbursed for the time value of money at an 8% annual rate. Explain how you would compute the required annual payment.