The future value of an annuity due is greater than the future value of an otherwise identical ordinary annuity.

Name: The future value of an annuity due is greater than the future value of an otherwise identical ordinary annuity.
Brand: Quizplus
Rating: 4.8 (41 reviews)

Question

Quizplus · Accepted Answer

This is because in an annuity due, each payment is made at the beginning of each period, leading to one extra compounding period and therefore a higher future value compared to an ordinary annuity where payments are made at the end of each period.

The Future Value of an Annuity Due Is Greater Than