[Future value of an annuity]: Using the values below, answer the questions that follow.

Amount of annuity $3,000

Interest rate 6%

Deposit period (years) 12

a. Calculate the future value of the annuity, assuming that it is

(1) An ordinary annuity. (Round to nearest cent)

(2) An annuity due. (Round to nearest cent)

b. Compare your findings in parts a(1) and a(2). All else being identical, which type of annuityordinary or annuity dueis preferable as an investment? (Select best answer below)

Option 1: Annuity due, because it yields a greater FV

Option 2: Ordinary annuity, because it yields a greater FV