If the interest rate is positive,then the present value of an annuity due will be less than the present value of an ordinary annuity.

Question

Quizplus · Accepted Answer

The present value of an annuity due is greater than the present value of an ordinary annuity because payments for an annuity due are made at the beginning of each period, allowing each payment to accrue interest for an additional period compared to an ordinary annuity, where payments are made at the end of each period.

If the Interest Rate Is Positive,then the Present Value of an Annuity