TVM questions - define if it is a regular annuity. like, regular, received, therefore

jlg1982

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.

siavosh

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

ramdabom

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.