Question: e. What is an annuity due? How does this differ from an ordinary annuity? f. What is the present value of an ordinary annuity of

e. What is an annuity due? How does this differ from an ordinary annuity?

f. What is the present value of an ordinary annuity of

$2 comma 6002,600

per year for

2525

years discounted back to the present at

1111

percent? What would be the present value if it were an annuity due?

g. What is the future value of an ordinary annuity of

$2 comma 6002,600

per year for

2525

years compounded at

1111

percent? What would be the future value if it were an annuity due?

h. You have just borrowed

$260 comma 000260,000,

and you agree to pay it back over the next

3030

years in

3030

equal end-of-year payments plus

percent compound interest on the unpaid balance. What will be the size of these payments?

i. What is the present value of a perpetuity of

$1 comma 8001,800

per year discounted back to the present at

percent?

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