An Annuity Due and an Ordinary Annuity Have Equal Payments

question 3

Multiple Choice

An annuity due and an ordinary annuity have equal payments, the same interest rates, and the amount of time between the payments is equal. Which statement is true?

• A) The present value of the annuity due is less than the present value of the ordinary annuity.
• B) The future value of the annuity due is less than the future value of the ordinary annuity.
• C) The future value of the annuity due is equal to the future value of the ordinary annuity.
• D) The present value of the annuity due is greater than the present value of the ordinary annuity.

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