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You are given an annual payment (PMT), an interest rate (I), and a period of time (n). For an ordinary annuity you find the value
You are given an annual payment (PMT), an interest rate (I), and a period of time (n). For an ordinary annuity you find the value to be more than for an annuity due for the same data. You would consider your answers to be _______.
Correct; ordinary annuities will always be greater than annuity dues | ||
Incorrect; annuity dues will provide more compounding and a greater value | ||
Incorrect; answers will be equal given the same data | ||
Correct; compounding will cancel over the time period to give higher values to ordinary annuities |
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