1.(a) What is the difference between an ordinary annuity and an annuity due?

The main difference between an ordinary annuity and an annuity due is the timing of the payment.If the payment is due at the beginning of the period, it is an annuity due. If the payment is due at the end of a period, it is a regular annuity.A common example of annuity due is insurance premiums because the payment is due at the beginning of the insured period of time.A common example of an ordinary annuity is a stock dividend that pays out at the end of the designated period.

(b) What type of annuity is shown in the following cash flow timeline? (This is an example of an ordinary annuity.

(c) How would you change it to the other type of annuity?