Question 16 2

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Question 16 2.4 points SA Calculate the present value of the annuity assuming that it is (1) an ordinary annuity (2) an annuity due comparing the two types of annuities, all else equal. Which type is more preferable? Why? Amount of annuity interest rate Deposit period (years) 555000 126 15 Ordinary annuity - 374598, annuity due - 419549, annuity due is better because it discounts for one less year. Ordinary annuity - 419549, annuity due 374598, ordinary annuity is better because it compounds for one more year Ordinary annuity = 419549, annuity due - 374590, ordinary annuity is better because it discounts for one less year, Ordinary annuity - 374598. annuity dur419549, annuty do better because it compounds for one more year