If the interest rate is positive,then the future value of an annuity due will be greater than the future value of an ordinary annuity.

Question

Quizplus · Accepted Answer

This is because in an annuity due, the payments are made at the beginning of each period, which means they earn interest for one additional period compared to an ordinary annuity where payments are made at the end of each period. So, with a positive interest rate, the extra period of interest will result in a higher future value for the annuity due.

If the Interest Rate Is Positive,then the Future Value of an Annuity