Terminologies in Engineering Economics: Chapter 1

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What is the difference between ordinary simple interest and exact simple interest?

The treatment of accrued interest from previous periods

The method of compounding interest

The frequency of interest payments

The number of days in a year used for calculation (correct)

What is the difference between nominal rate of interest and effective rate of interest?

The inclusion of accrued interest

The frequency of compounding (correct)

The treatment of leap years

The calculation method for interest

What is continuous compounding of interest based on?

Frequency of principal adjustments

Exact number of days in a year

Assumption of annual cash payments

Compounding throughout the year (correct)

In annuity, what is the key difference between ordinary annuity and deferred annuity?

The timing of payments Signup and view all the answers

What distinguishes an annuity due from other types of annuities?

The timing of payments Signup and view all the answers

What type of money is derived from its inherent worth as a physical commodity?

Commodity Money Signup and view all the answers

Which type of money is initially backed by precious metals and then evolved to represent assets like gold reserves or government bonds?

Representative Money Signup and view all the answers

What type of currency is not backed by any physical commodity and derives its value from government decree, public trust, and economic stability?

Fiat Money Signup and view all the answers

Which type of money is based on claims on future payments arising from credit extensions and the creditworthiness of the issuer?

Credit Money Signup and view all the answers

What is the definition of interest in the context of economics?

The amount of money paid for the use of borrowed capital Signup and view all the answers

Terminologies in Engineering Economics: Chapter 1

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Questions and Answers

What is the difference between ordinary simple interest and exact simple interest?

What is the difference between nominal rate of interest and effective rate of interest?

What is continuous compounding of interest based on?

In annuity, what is the key difference between ordinary annuity and deferred annuity?

What distinguishes an annuity due from other types of annuities?

What type of money is derived from its inherent worth as a physical commodity?

Which type of money is initially backed by precious metals and then evolved to represent assets like gold reserves or government bonds?

What type of currency is not backed by any physical commodity and derives its value from government decree, public trust, and economic stability?

Which type of money is based on claims on future payments arising from credit extensions and the creditworthiness of the issuer?

What is the definition of interest in the context of economics?

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