Which of the following relationships between compound interest factors is not co

Question

Which of the following relationships between compound interest factors is not correct? Single payment compound amount factor and single payment present worth factor are reciprocals. Sinking fund factor and uniform series compound amount factor are reciprocals. Capital recovery factor and uniform series present worth factor are reciprocals. Capital recovery factor equals sinking fund factor plus the interest rate. Capital recovery factor and sinking fund factor are reciprocals. For some interest rate i and some number of interest periods n, the uniform series capital recovery factor is 0.0854 and the sinking fund factor is 0.0404. the interest rate i must be 3 1/2% 4 1/2% 6% 8% 9% A bank pays 1% interest on savings accounts four times a year. The effective annual interest rate is 1.00% 1.04% 3.96% 4.00% 4.06%

Explanation / Answer

Solution.

1.

B. Sinking fund factore and uniform serise compound amount factore are reciprocal.

2. 4.5%

3. Effective rate of interest.

A. 1.00%

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