Final answer:
The future value of a deferred annuity is generally less than that of a non-deferred annuity at the same interest rate.
Step-by-step explanation:
In terms of future value, a deferred annuity refers to a situation where the payments are delayed until a later date. On the other hand, a non-deferred annuity involves immediate payments. Generally, the future value of a deferred annuity will be less than that of a non-deferred annuity at the same interest rate. This is because the deferred annuity has a longer time period for interest to compound, resulting in a smaller ending value.
For example, let's consider two annuities:
Deferred annuity: $10,000 per year for 10 years with an interest rate of 5%
Non-deferred annuity: $10,000 per year for 10 years with an interest rate of 5%
The future value of the deferred annuity will be lower compared to the non-deferred annuity due to the delayed payments and longer compounding period.