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BA II PLUS: END and BGN at a common value date

Beginning payments occur one interval earlier than end payments when both future values are measured at time N.

Omni Finance AcademyBy Omni Finance Academy
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List the payment dates before choosing the switch

Five annual outflows of 1,000; FV measured at time 5
PatternPayment datesFV date
END1,2,3,4,55
BGN0,1,2,3,45

Use the same numerical inputs

Set P/Y = C/Y = 1, N = 5, I/Y = 6, PV = 0 and PMT = −1,000. The negative payments describe outflows. The positive future value balances those modeled cash flows.

Inspect the timing state, then solve

  1. Open the timing worksheet2ndBGN

    Read whether END or BGN is selected.

  2. Select END when needed, return and compute2ndSET2ndQUITCPTFV

    Toggle only if the current state is BGN. The END mathematical result is +5,637.09296.

  3. Change from END to BGN and recompute2ndBGN2ndSET2ndQUITCPTFV

    The BGN mathematical result at the same time-5 date is +5,975.318538.

Check the one-period factor

Every BGN payment grows for one more interval than its END counterpart. With these inputs, the BGN future value is the END value × 1.06. This is a timing comparison under a constant-rate model, not a claim that one real financial product is better.

Further references