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Case Amount of annuity $1,500 500 30,000 11,500 AUDH B Interest rate 8% ga 14 Deposit period (years) 10 a. Calculate the future value of the annuity assuming that it is (1) An ordinary annuity. (2) An annuity due. $ b. Compare your findings in parts all) and a(2). All else being identical, which type of annuity--ordinary or annuity due-is preferable? Explain why,

Case Amount of annuity $1,500 500 30,000 11,500 AUDH B Interest rate 8% ga 14 Deposit period (years) 10 a. Calculate the future value of the annuity assuming that it is (1) An ordinary annuity. (2) An annuity due. $ b. Compare your findings in parts all) and a(2). All else being identical, which type of annuity--ordinary or annuity due-is preferable? Explain why,

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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PART 2 Financial Tools P5-19 Future value of an annuity For each case in the accompanying table, answer the questions that follow. Case B E meny Amount of annuity $ 2,500 30.000 11,500 6,000 Interest rate *%* 23^2 12 14 Deposit period (years a. Calculate the future value of the annuity assuming that it is (1) An ordinary annuity, (2) An annuity due. b. Compare your findings in parts all) and a(2). All else being identical, which type of annuity-- ordinary or annuity due—is preferable? Explain why,
Transcribed Image Text:PART 2 Financial Tools P5-19 Future value of an annuity For each case in the accompanying table, answer the questions that follow. Case B E meny Amount of annuity $ 2,500 30.000 11,500 6,000 Interest rate *%* 23^2 12 14 Deposit period (years a. Calculate the future value of the annuity assuming that it is (1) An ordinary annuity, (2) An annuity due. b. Compare your findings in parts all) and a(2). All else being identical, which type of annuity-- ordinary or annuity due—is preferable? Explain why,
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