Answer:
- The first cash flow of an annuity due is made on the first day of the agreement.
- The last cash flow of an ordinary annuity is made on the last day covered by the agreement.
Explanation:
The difference between an Annuity due and an Ordinary annuity is the timing in the period it is paid. Annuity dues are paid in the beginning of the period which means that they accrue more interest because they have the rest of the year to build.
Ordinary annuities on the other hand see their cashflows made on the last day of the period which is why the last cash flow of an ordinary annuity is made on the last day covered by the agreement.
