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Present value of an annuity Consider the following case. (Click on the icon here in order to copy the contents of the data table below
Present value of an annuity Consider the following case. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Amount of annuity Interest rate Period (years) $16,000 11% 9 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. The present value of the ordinary annuity is $ (Round to the nearest cent.) The present value of the annuity due is $. (Round to the nearest cent.) b. Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity is preferable? (Select the best answer below.) E O Ordinary annuity, because all else being identical, it will yield a higher present value. Annuity due, because all else being identical, it will yield a higher present value
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