Regarding the future value of an annuity the future value of

Regarding the future value of an annuity, the future value of an annuity due will always be worthless compared to the future value of an ordinary annuity?

True or False?

Solution

The statement is False .

The annuity due is more valuable than the ordinary annuity due to time value of money because under annuity due you will invest amount today and and get return on it whereas under ordinary annuity ,you will invest amount at end of period and thus loose return on it .