Compare an annuity due with an ordinary annuity. The payments for both are made annually and are

Question:

Compare an annuity due with an ordinary annuity. The payments for both are made annually and are of the same dollar amounts. The two annuities also have the same duration in years and the same discount rate. Which of the following statements is/are correct?
a. The present value of the ordinary annuity is greater.
b. The present value of the annuity due is greater.
c. The future value of the ordinary annuity is greater.
d. The future value of the annuity due is greater.

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...

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