Question: Future value of an annuity Using the valuesbelow, answer the questions that follow.(Click on the icon located on thetop-right corner of the data table below

Future value of an annuityUsing the valuesbelow, answer the questions that follow.(Click on the icon located on thetop-right corner of the data table below in order to copy its contents into aspreadsheet.)

Amount of annuity Interest rate Deposit period(years)

$4,000 7% 5

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

(1) An ordinary annuity.

(2) An annuity due.

b.Compare your findings in parts a(1) and a(2). All else beingidentical, which type of annuityordinary or annuity dueis preferable as aninvestment? Explain why.

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