FIN220 Question 7. What is an annuity? Give some examples of annuities. And what is an annuity due? How does this differ from an ordinary annuity? Question 8. Suppose you are considering taking consumer loan from bank for one year. Usually, for short- term loans, the bank offers 12 percent interest that compounds annually. Your credit application has been viewed by a few banks and two of them replied; Bank ALFA offers you a loan at 12 percent annual rate interest payment by the end of year, and Bank BETA offers a loan with the same annual interest rate, but interest payment is 3 percent by the end of each quarter. Which loan do you prefer? Why? Question 9. Nikora Ltd., based in Georgia, produces meat and milk products. The company sold old machinery for 100,000 Georgian Lari (GEL) and decided to put this amount in a term deposit, which usually pays 10 percent annually. a. Calculate the amount of money that Nikora will receive after 2, 4, and 7 years of deposit b. Re-calculate results from part (a) if bank offers 10 percent annual compound interest on semi-annual basis. c. Re-calculate results from part (a) if bank offers 10 percent annual simple interest rate basis