For any discount rate and number of periods, the present value of an annuity due factor is always greater than the corresponding present value of an ordinary annuity factor.

Question

Quizplus · Accepted Answer

In an annuity due, payments are made at the beginning of each period, so each payment is discounted for one less period compared to an ordinary annuity, where payments are made at the end of each period. This results in a higher present value for an annuity due.

For Any Discount Rate and Number of Periods, the Present