As discussed in the text, an annuity due is identical to an ordinary annuity except that the

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As discussed in the text, an annuity due is identical to an ordinary annuity except that the periodic payments occur at the beginning of each period instead of at the end of the period. Show that the relationship between the value of an ordinary annuity and the value of an otherwise equivalent annuity due is:

Annuity due value = Ordinary annuity value × (1 + r)

Show this for both present and future values.

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Fundamentals Of Corporate Finance

ISBN: 9781265553609

13th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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