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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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## Q : What is the value of a perpetuity

What is the value of a perpetuity with an annual payment of $100 and a discount rate of 6%?