The difference between an ordinary annuity and an annuity due is:

Question

Quizplus · Accepted Answer

The difference between an ordinary annuity and an annuity due is that an ordinary annuity assumes that the cash flows occur at the end of the period, while an annuity due assumes that the cash flows occur at the beginning of the period. In other words, with an ordinary annuity, payments are made at the end of each period, while with an annuity due, payments are made at the beginning of each period. This difference can affect the calculations of present value and future value.

The Difference Between an Ordinary Annuity and an Annuity Due