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    Future Value of Annuity versus Annuity Due

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    Future value: annuity versus annuity due

    What's the future value of a 7 percent, 5-year ordinary annuity that pays $300 each year? If this were an annuity due, what would its future value be?

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    Solution Preview

    Future value of an annuity can be calculated using the FV of annuity formula. It is given as

    FV = ...

    Solution Summary

    The solution explains how to calculate the future value of an annuity