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is the present value of an ordinary annuity larger than the present value of an annuity...

is the present value of an ordinary annuity larger than the present value of an annuity due?
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Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

Present value of annuity due=Present value of annuity*(1+interest rate).

An ordinary annuity is end of year equal payments for a fixed interval of time at a specified interest rate.However an annuity due is beginning of year fixed payments unlike an ordinary annuity.

Hence present value of annuity due is greater than the Present value of ordinary annuity.

Hence  present value of an ordinary annuity is not larger than the present value of an annuity due

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