LG P5-20 Present value of an annuity Consider the following cases. Case Interest rate Period (years) 7% Amount of annuity $ 12,000 55,000 700 140,000 22,500 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 al 1) and a(2). All else being identical, which type of annuity--ordinary or annuity due-is preferable? Explain why