hey guys I was trying to solve this question for my accounting class but don't seem to understand the logic behind it.. Would I use an ordinary annuity or annuity due rate? and Why?

Acme has agreed to make five annual $5,000 payments into an account starting today. The last payment will be four years from today. If the interest rate is 8% with annual compounding on the payment dates, to what value will the account balance grow by the time the last payment has been made into the account?

Will pay someone 100 fg as a gesture of appreciation if they explain it to me in a way that I understand!! thank you

This is annuity due because you're making payment on the first day instead of the last day of the year. This would result in less interest.

No need fg

Thank you for the reply. I also thought that this was an annuity due because it says starting today but my professor told me that it was actually an ordinary annuity.

Don't see how it'll be ordinary. Is there any other information? Also what school you go to?

he told me to look from the 'right end' so instead of looking at the start date you would look at the ending date which is your payment period. I go to USC its a school in LA california..

Annuity Due.
Acme has agreed to make five annual $5,000 payments into an account starting today. The last payment will be four years from today.

You pay it right away. 5 years - 1 payment now = 4 years left.

last payment will be 4 years from today. 4-4=0

Your professor is an idiot