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What is the difference of the future amounts of the annuity due and ordinary annuity for...

What is the difference of the future amounts of the annuity due and ordinary annuity for regular quarterly payments of 14000 at 14% compounded quarterly.

Please Solve As soon as
Solve quickly I get you UPVOTE directly
Thank's
Abdul-Rahim Taysir

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Answer #1

Ordinary annuity is one in which the payment is made at the end of the time period. And annuity due is one in which payment occurs at the beginning of the time period.

Interest rate = 14% compounded quarterly.

Calculating the future value of investment (Ordinary annuity).

Now,calculating the FW of annuity due

The difference between the two method is

Difference = 2,428,234.65 - 2,346,120.43 = $ 82,114.22

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