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Amount of Annuity $ 42,000
Interest Rate 11%
Period 12 (years)
1) What is the present value of the ordinary annuity?
2) Calculate the present value of the annuity assuming that it is an annuity due?
3) Compare your findings in part 1 and 2 all else being identical, which type of annuity ordinary or annuity due yields a higher present value?
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