Question: .1) Consider the following five annuities: annual $ amount / Annual rate / Number of years A. 12,000 / 7 / 3 B. 55,000 /12

.1) Consider the following five annuities:

annual $ amount / Annual rate / Number of years

A. 12,000 / 7 / 3

B. 55,000 /12 /15

C. 700 / 20 / 9

D. 140,000 / 5 / 7

E. 22,500 / 10 / 5

For each of the five annuities (A E), calculate the present value (PV) twice once as a regular (deferred) annuity and once as an annuity due.

2. Refer to your answers to question #1. All else being equal, which type of annuity (deferred or due) would be preferable. Why?

3. Now, consider the following five annuities:

annual $ amount / Annual rate / Number of years

A. 2,500 / 8 / 10

B. 500 / 12 / 6

C. 30,000 / 20 / 5

D. 11,500 / 9 / 8

E. 6,000 / 14 / 30

For each of the five annuities (A E), calculate the future value (FV) twice once as a regular (deferred) annuity and once as an annuity due.

4. Refer to your answers to question #3. All else being equal, which type of annuity (deferred or due) would be preferable. Why

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