For five payments of 25,000 at 8 percent, the annuity due value exceeds the ordinary annuity value by:

1. The gap is exactly one extra period of interest. 2. That period is priced at the 8 percent rate used throughout. 3. So the annuity due is 8 percent higher. _Source: OpenStax Principles of Finance 2e, Chapter 8, Time Value of Money II._