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b)Everything else equal, which annuity has the greater futurevalue: an     annuity or an annuity...

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Accounting

b)Everything else equal, which annuity has the greater futurevalue: an     annuity or an annuity due?Why?

c) What is the difference between an ordinary annuity and anannuity due

d) All else equal, which annuity has the greater present value:an ordinary annuity or an annuity due? Why?

Answer & Explanation Solved by verified expert
3.6 Ratings (295 Votes)
b Future Value of the annuity due is greater than the Future Value of the ordinary annuity Analysis of the above statement in point b With an annuitydue the payments are made at the beginning rather than the end of the period The difference between the future value of an annuity due AD and future value of an ordinary annuity OA is based on the timing of the payments ADs pay starting immediately while OAs pay at the end of the period Concept may be explained with the below mentioned example For example lets say you are going to get an annuity that    See Answer
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In: Accountingb)Everything else equal, which annuity has the greater futurevalue: an     annuity or an annuity due?...b)Everything else equal, which annuity has the greater futurevalue: an     annuity or an annuity due?Why?c) What is the difference between an ordinary annuity and anannuity dued) All else equal, which annuity has the greater present value:an ordinary annuity or an annuity due? Why?

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