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Ordinary Annuities and Annuities Due [LO1] As discussed in the text, an annuity

due is identical to an

ordinary annuity except that the periodic payments occur

at the beginning of each period and not at the end of the period. Show that the

relationship between the value of an ordinary annuity and the value of an otherwise

equivalent annuity due is:

Annuity due value = Ordinary annuity value * (1 + r )

Show this for both present and future values.

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