Why Does an Annuity Due Have a Greater Future Value

question 95

Essay

Why does an annuity due have a greater future value than a regular annuity, all things being equal?

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Definitions:

Journal Entries

Records of financial transactions entered into an accounting system, ensuring that the debits equal the credits in financial accounting records.

Cash

Liquid assets held by an individual or company, which include currency and demand deposits readily available for transactions.

Debits Than Credits

Debits than credits refers to a situation where the total debits in an account or transaction exceed the total credits, impacting the balance.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial position, showing its assets, liabilities, and shareholders' equity at a specific point in time.