Question: Explain the difference between present value and future value. How can effective rate of interest be different that the nominal or stated rate of interest?

Explain the difference between present value and future value.

How can effective rate of interest be different that the nominal or stated rate of interest?

How can you tell in a word problem if the problem is calling for a future value amount or a present value amount?

4. Explain the difference between an ordinary annuity and an annuity due. Begin by explaining what an annuity is.

5.Explain how you use the ordinary annuity table to calculate an annuity "due.

6. Comment on some situations where you would use the present value of ordinary annuity table.

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