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Present value of an annuityConsider the following case. a.Calculate the present value of the annuity assuming that it is (1) An ordinary annuity. (2) An

Present value of an annuityConsider the following case.

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

annuityordinary or annuity dueis preferable? Explain why?

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