The values shown in ordinary annuity tables (either present value or compound value) can be adjusted to the Annuity due form by the ordinary annuity interest factor by . A)dividing, (1 + i) B)dividing, (1 + i)ⁿ C)multiplying, (1 + i) D)multiplying, (1 + i)ⁿ

Question

Quizplus · Accepted Answer

To adjust the values shown in ordinary annuity tables to the annuity due form, we need to consider the fact that in an annuity due, payments are made at the beginning of each period, whereas in an ordinary annuity, payments are made at the end of each period. This means that the first payment in an annuity due is made immediately, whereas the first payment in an ordinary annuity is made after one period. To account for this difference, we need to multiply the ordinary annuity interest factor by (1 + i), which reflects the interest earned on the first payment for one period. Therefore, the correct answer is C.

The Values Shown in Ordinary Annuity Tables (Either Present Value