Calculate the future value of the annuity


Problem: For each case in the table, answer the questions that follow.

Case-- Amt. of Annuity-- Int. Rate-- Deposit(yrs)--

A-- $2500-- 8%-- 10--
B-- 500-- 12- 6--
C-- 30,000-- 20-- 5--
D-- 11,500-- 9-- 8--
E-- 6,000-- 14-- 30--

1) Calculate the future value of the annuity assuming that it is

A. an ordinary annuity
B. an annuity due

2) Compare your findings in parts a.1. and a.2. All else being identical, which type of annuity-ordinary or annuity due-is preferable? Explain why.

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Finance Basics: Calculate the future value of the annuity
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