Question

In which of the following frequency of compounding present value of annuity will be lowest ?

daily

quaterly

monthly

annual

Answer 1

$\huge{\underline{\underline{\star{\mathfrak{answer}}}}}\star$

Question :- In which of the following frequency of compounding present value of annuity will be lowest ?

(a) daily

(b) quaterly

(c) monthly

(D) annual


Answer :- (a) DAILY.

========
Thanks !!

Answer 2

Annual

Here the time duration is the longest and the applied rate will occur only once in a year.  The interest charged here is less as compared to the rest of durations .The annuity value on  annual basis will be applied only once . Thus the principal amount added to interest will be  once in a year which is lower as compared to other periods . Thus higher the discounted rate , lower the present value of annuity . An ordinary annuity is equal payments made at the end of each period over a fixed amount of time .