Discussion
Consider the following statements about interest factors.
1. \( (P/A) \) places its value one period before the first payment 2. \( (A/P) \) exceeds \( (A/F) \) by the interest rate 3. \( (F/A) \) places its value one period after the last payment
Answer: C
Correct answer: 1 and 2 only are correct
Statements 1 and 2 are correct: \( (P/A) \) places its value one period before the first payment, and the capital recovery factor exceeds the sinking fund factor by exactly the interest rate. Statement 3 is wrong - \( (F/A) \) places its value at the date of the last payment, not a period beyond it.
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