Question: You are comparing two annuities that pay cash annually for twelve years. The annuities are identical except for the payment dates. Annuity A pays on

You are comparing two annuities that pay cash annually for twelve years. The annuities are identical except for the payment dates. Annuity A pays on the last day of each year but annuity B pays on the first day of each year. Which one of these statements is correct:

Annuity A has a higher future value than annuity B

.

Both annuities are of equal value today.

Annuity A is an annuity due.

Annuity B has a higher present value than annuity A

.

Both annuities have the same future value as of twelve years from now.

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