How do you calculate the present value of an annuity due according to the methods outlined in the chapter?

To calculate the present value of an annuity due, first calculate the present value as if it were an ordinary annuity. Then, multiply that result by (1 + r), where r is the discount rate.

The present value of an annuity due can be determined in two steps. First, compute the present value as if it were an ordinary annuity. Then, to adjust for the fact that payments occur at the beginning of each period, multiply the ordinary annuity present value by (1 + r), where r represents the discount rate. This method accounts for the additional cash flow received at the start of the first period.