ordinary annuity Archives

What is the most you should pay for the annuity? If the payments began immediately, how much would the annuity be worth?

Posted on December 14, 2022 by Assessments

Why does an annuity due have a higher present value than an ordinary annuity?If you know the present value of an ordinary annuity, how could you find the PV of the corresponding annuity due?What is the PVA of an ordinary annuity with 10 payments of $100 if the appropriate interest rate is 10 percent? What […]

How much will you have after five years? How much would you have if you made the deposits at the end of each year?

Posted on December 14, 2022 by Assessments

Because each payment occurs one period earlier with an annuity due, the payments will all earn interest for one additional year. Therefore, the FV of an annuity due will be greater than that of a similar ordinary annuity. If you went through the step-by-step procedure, you would see that our illustrative annuity due has an […]

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Tag: ordinary annuity

What is the most you should pay for the annuity? If the payments began immediately, how much would the annuity be worth?

How much will you have after five years? How much would you have if you made the deposits at the end of each year?