Suppose you are evaluating two annuities. They are identical in every way, except that one is an ordinary annuity and one is an annuity due.
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# Suppose you are evaluating two annuities. They are identical in every way, except that one is an ordinary annuity

and one is an annuity due. Assuming an interest rate of 10%, which of the following is true?

The two annuities will differ in present value by the amount of exactly one of the annuity payments.

The annuity due will be larger than the regular annuity by an amount equal to the present value of the last annuity payment.

There is no way to compare these without knowing the payment amount.

The ordinary annuity must have a higher present value than the annuity due.

The annuity due must have the same present value as the ordinary annuity.

The regular annuity must have a lower future value than the annuity due.

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