Present value of an annuity???Using the values? below, answer the questions that follow.

Amount of annuity= $8,500 Interest rate= 7% Deposit period? (years)= 7

a.??Calculate the present 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

annuity -ordinary or annuity due- yields a higher present? value? Explain why.