. Compare the result o f the present value of a $6,000
ordinary annuity at 10 percent interest for...

Question

. Compare the result o f the present value of a $6,000
ordinary annuity at 10 percent interest for 10 years with the present value of a
$6,000 annuity due at 10 percent interest for 11 years.

David · Accepted Answer

Compare the result of the present value of a $6,000 ordinary annuity at 10 percent interest 
for 10 years with the present value of a $6,000 annuity due at 10 percent interest for 11 
years. 
Solution: 
Case 1: Ordinary annuity of $6,000, r=10% and n = 10 years 
Present value = Annuity amount x PVIFAn=10,r=10% 
Where:

. Compare the result o f the present value of a $6,000 ordinary annuity at 10 percent interest for 10 years with the present value of a $6,000 annuity due at 10 percent interest for 11 years.

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