Future value of an annuityUsing the values below, answer the questions that follow.(Click on the icon here

in order to copy the contents of the data table below into a spreadsheet.)

Amount of annuity	Interest rate	Deposit period (years)
$7,000	8%	10

a.Calculate the future value of the annuity, 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 being identical, which type of

annuityordinary

or annuity

dueis

preferable as an investment? Explain why.

Question content area bottom

Part 1

a. (1) The future value of the ordinary annuity is

$enter your response here.

(Round to the nearest cent.)

Part 2

(2) The future value of the annuity due is

$enter your response here.

(Round to the nearest cent.)

Part 3

b.Compare your findings in parts

a(1)

and

a(2).

All else being identical, which type of annuity is preferable as an investment?(Select the best answer below.)

Annuity due, because it yields a greater future value.

Ordinary annuity, because it yields a greater future value.