LG X MyLab P5-20 Present value of an annuity Consider the following cases. Case Annuity payment...
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LG X MyLab P5-20 Present value of an annuity Consider the following cases. Case Annuity payment Interest rate Annuity length (years) A $ 12,000 7% B $5,000 12 3 15 C 700 20 9 D 140,000 S 7 E 22,500 10 S 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 annuity-ordinary or annuity due-is preferable? Explain why. LG X MyLab P5-20 Present value of an annuity Consider the following cases. Case Annuity payment Interest rate Annuity length (years) A $ 12,000 7% B $5,000 12 3 15 C 700 20 9 D 140,000 S 7 E 22,500 10 S 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 annuity-ordinary or annuity due-is preferable? Explain why.
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