Which of the following is a true statement regarding the future value of an annuity due?
A)All else being equal,an annuity due will always generate a higher future value than an ordinary annuity.
B)All else being equal,an annuity due will never generate a higher future value than an ordinary annuity.
C)All else being equal,an annuity due will sometimes generate a higher future value than an ordinary annuity.
D)All else being equal,an annuity due will generate a higher future value than an ordinary annuity only if interest is compounded monthly.

Question

Quizplus · Accepted Answer

An annuity due generates payments at the beginning of each period, allowing more time for interest to accumulate compared to an ordinary annuity, which makes payments at the end of each period. This results in a higher future value for an annuity due, all else being equal.

Which of the Following Is a True Statement Regarding the Future