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Calculate the future value of the annuity

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Reference no: EM131167444

Consider the following cases.

Case

Amount of annuity

Interest rate

Period (years)

Your answers here

Ordinary

Due

A

$12,000

7%

3

B

22,500

10

5

  • a) Calculate the future value of the annuity that it is
    • i)An ordinary annuity (annuity immediate)
    • ii)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 preferred? Explain why.

Reference no: EM131167444

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