You are consi-dering two equal-ly risky annuities, each of whi-ch pays 5000 per ye-ar for 10 years. Invest-ment ORD is an ordinary (or defer-red) annuity, while Invest ment DUE is an ann uity due.- The pre-sent value of DUE exc-eeds the present value of ORD, and the future va-lue of DUE also exc-eeds the fut-ure value of ORD.
An annuity is a cont-ract bet-ween you and an insu-rance company that requires the insurer to make pay-ments to you, either immed-iately or in the future. You buy an annuity by ma-king either a single payment or a ser-ies of payments. Similarly, your pay-out may come either as one lump-sum pay-ment or as a series of payments over time.
To know more about annuity click below:
brainly.com/question/28481987
#SPJ4
