P5-20 Present value of an annuity Consider the following cases. Case Interest rate Annuity length (years) 3 7% 12 COA Annuity payment $ 12,000 55,000 700 140,000 22,500 20 9 5 E 10 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 (2). All else being identical, which type of annuity-ordinary or annuity due-is preferable? Explain why