Indicate whether each of the following statements is true (T) or false (F).(all sections)
a. Interest is money paid for the use of equity capital.
b. (A/F, i%, N) = (A/P, i%, N) + i.
c. Simple interest ignores the time value of money principle.
d. Cash-flow diagrams are analogous to free-body diagrams for mechanics problems.
e. $1,791 10 years from now is equivalent to $900 now if the interest rate equals 8% per year.
f. It is always true that i > r when M ≥ 2.
g. Suppose that a lump sum of $1,000 is invested at r = 10% for eight years. The future equivalent is greater for daily compounding than it is for continuous compounding.
h. For a fixed amount, F dollars, that is received at EOYN, the “A equivalent” increases as the interest rate increases.
i. For a specified value of Fat EOYN, Pat time zero will be larger for r = 10% per year than it will be for r = 10% per year, compounded monthly.