标题: TVM questions define if it is a regular annuity. [打印本页] 作者: Kiakaha 时间: 2013-4-1 12:42 标题: TVM questions define if it is a regular annuity.
Hi,
i chance upon some questions and i like to check if the questions states if it is an regular annuity.
with the first payment to be received 5 years from NOW = This is regular annuity, therefore no need to set to BGN mode.
with first payment is to be received 5 years from TODAY = This is regular annuity, therefore no need to set to BGN mode.
Is my understanding correct?
Thanks for the help and guidances.作者: smuggycfa 时间: 2013-4-1 12:43
You can do it both ways:
Ordinary annuity the PV of payments will be the value 4 years from now, so you’ll have to discount it by (1+R)^4
Annuity due the PV is 5 years from now discount with (1+R)^5.
Since I hate to keep switching the calculator, I always use the first method.作者: Howd 时间: 2013-4-1 12:43
So can i say the question which i post, both of them are Ordinary annuity?作者: joehogue 时间: 2013-4-1 12:43
It doesn’t actually matter what you call it. Like Beatnik said, you can calculate it as a ordinary annuity or annuity due. Just discount it by the correct number of years to the present.
If you get confused between the two, it helps if you draw up a time line.
