TVM questions define if it is a regular annuity. first, set, therefore, received, regular

Kiakaha

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.

joehogue

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.

Howd

So can i say the question which i post, both of them are Ordinary annuity?

smuggycfa

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.