Compared with an otherwise identical ordinary annuity, the value of an annuity due is always:
ALevel
BLater
CLarger
DLower
Answer & Solution
Correct answer: C. Larger
1. Money arrives or is invested one period sooner.
2. That extra period of interest works in the holder's favour.
3. So the annuity due value is always larger.
_Source: OpenStax Principles of Finance 2e, Chapter 8, Time Value of Money II._
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