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Understanding Cash flow Function, Part -2, CFP

Posted by Prashant Shah on August 30, 2017

2 Responses to “Understanding Cash flow Function, Part -2, CFP”

  1. R Varadarajan said

    In the step 2 of the 1st example, why the number of years have been taken as 2. According to the problem the annuity starts at the end of 3 years. So, the period should have been 3. Please clarify.

    • Hi,

      Present value has been calculated in end mode hence PV of same comes at the end of 2nd year. But if the PV has been calculated in beginning mode it would have been at the end of 3rd year.

      Regards.

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