In Comparing an Ordinary Annuity and an Annuity Due, Which

question 57

Multiple Choice

In comparing an ordinary annuity and an annuity due, which of the following is true?

• A) The future value of an annuity due is always less than the future value of an otherwise identical ordinary annuity, since one less payment is received with an annuity due.
• B) All things being equal, one would prefer to receive an ordinary annuity compared to an annuity due.
• C) The future value of an annuity due is always greater than the future value of an otherwise identical ordinary annuity.
• D) The future value of an ordinary annuity is always greater than the future value of an otherwise identical annuity due.

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