The difference between the PV of an annuity due and the PV of an ordinary annuity is that each of the payments of the annuity due is discounted by one more year.

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This is because in an annuity due, the first payment is made immediately at the beginning of the period, whereas in an ordinary annuity, the first payment is made at the end of the period. Therefore, the payments in an annuity due are discounted for one additional year compared to an ordinary annuity.

The Difference Between the PV of an Annuity Due and the PV