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Future value of an annuity. Using the values below, answer the questions that follow. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)

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

a. Calculate the future 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- is preferable as an investment? Explain why.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92865541

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