|Author||Topic: Confused about END/BGN calculations|
|Can you please help me understand when to use end or bgn type computations for TVM problems, as I am a little confused.
For instance, if there is a problem like: you have to pay for tuition 10 years from now at t10 for 4 years at the beginning of each year. For those 10 years you are making regular deposits. So, at t10, the date of the last deposit coincides with the date of the first payment.
Is it correct to equate the FV of the deposits in END mode to t10 with the PV of the payments in BGN mode at t10?
|Just draw a timeline. Don't try to be supersmart.
If you draw a timeline, then you'll perfectly understand what you need to do, and you can forget about the BGN/END problem.
Since the beginning of my very first Business Finance 101 class, I have never ever ever used the BGN mode on the calculator.