Consider the following cases.

Case	Amount of annuity	Interest rate	Period (years)	Your answers here
Ordinary	Due
A	$12,000	7%	3
B	22,500	10	5

• a)Calculate the present value of the annuity that it is
  • i)An ordinary annuity (annuity immediate)
  • ii)An annuity due
• b)Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity, ordinary or annuity due, is preferred? Explain why.