Question
There are two types of annuity payments. An ordinary annuity has the first payment starting at the end of the next period. This is associated
There are two types of annuity payments. An ordinary annuity has the first payment starting at the end of the next period. This is associated with payments such as car or house payments.
An Annuity Due has payments starting immediately. This would be similar to a payment for leasing an asset like an apartment or piece of equipment.
Below is an example of an annuity due or an ordinary annuity? Decide and compute the correct value.
What is the present value of six payments of $140 made on an apartment? Assume the first of the six payments occurs immediately before you can move in and the appropriate discount rate is 10%.
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