Present value of an annuityConsider the following case.(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)

Amount of annuity	Interest rate	Period (years)
$37 comma 00037,000	55%	1414

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

annuitylong dashordinary

or annuity

duelong dashyields

a higher present value? Explain why.

The present value of the ordinary annuity is

$nothing.

(Round to the nearest cent.)The present value of the annuity due is

$nothing.

(Round to the nearest cent.)b.Compare your findings in parts

a(1)

and

a(2).

All else being identical, which type of annuity yields a higher present value?(Select the best answer below.)

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.