Question

How do you convert an ordinary annuity present value formula to an annuity due present value formula? A. Multiply the ordinary annuity present value by (1 + i) B. Divide the ordinary annuity present value by (1 + i) C. Subtract (1 + i) from the ordinary annuity present value D. Add (1 + i) to the ordinary annuity present value

Answer 1

A

Explanation:

PVOrdinary = C { 1-(1+i)^-n} / i

PVDue = C {1-(1+i)^-n } / i * (1+i)