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Amount of annuity $21,000 Interest rate 9% Period (years) 9 a.Calculate the present value of the annuity assuming that it is (1) An ordinary annuity.

Amount of annuity

$21,000

Interest rate

Period (years)

a.Calculate the present value of the annuity assuming that it is

(1) An ordinary annuity.

(2) An annuity due.

b.Compare your findings in parts

a(1) and a(2).All else being identical, which type of annuityordinary or annuity dueis preferable? Explain why.

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