Usually cash flows are recieved at the end of the period, sometimes it's paid at the beginning. Unless it's stated explicitly that the payments are made at the beginning then dont' worry; I.e. Unless it's stated the PMT's are at the BGN, then assume END. Here is an example of how most questions are phrased.
EG) a client plans retire in 35 years and wants to withdraw $100k each year at the beginning of the year for the 15 years. He plans to make conrtibutions at the end of each month and expects assets to return 12% before retirement and 8% after retirement. How much must he invest each month for the next 35 years to accomplish this?
ANS1) Solve for a beginning annuity (PMT 100k, N=15, I/Y=8) Compute PV1.
Solve for an ending annuity (FV = PV1, N=420 N=1, I/Y = 12) Compute PMT.
Edited 1 time(s). Last edit at Saturday, September 9, 2006 at 12:00PM by jamespucyk.