Question: For each case in the accompanying table, answer the questions that follow. a. Calculate the future value of the annuity assuming that it is (1)

For each case in the accompanying table, answer the questions that follow.

Case Amount of annuity Interest rate Deposit period (years) $ 2,500 8%

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 a(1) and a(2). All else being identical, which type of annuity - ordinary or annuity due - is preferable? Explain why.

Case Amount of annuity Interest rate Deposit period (years) $ 2,500 8% 12 500 2 30,000 11,500 6,000 14 30

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