Difference in approach on TVM- Schweser vs CFAI

On the topic of begin vs end mode: I have the following query:

There is a specific practice problem in the CFAI 2017 curriculum notes under the TVM section (practice problem no. 8). In this instance, the annuity payments for university tuition are paid at the beginning of each period. The solution does not take into account that these payments are beginning of each annual period and instead these are considered end of year payments. If the BEG mode is used to calculate the initial PV ( used as FV in calculation of required payment amount) the question will be answered incorrectly.

However, there is a similar example in the Schweser notes, where annuities are paid at beginning of each period, with this solution taking into account that the annuities are paid at the beginning of each period.

Not sure which logic correct- any assistance on this one

Do the samples use two different values for N?

Example: BGN

N = 5; i/y = 6; PMT = -200; FV = 0; CPT -> PV

PV = $893.02

Example: END

N = 4; i/y = 6; PMT = -200; FV = 0; CPT -> PV

PV = $693.02

$693.02 + $200 (final) = $893.02

Hope that helps. Both logic is correct, it’s just a matter of preference. If you are choosing the latter, do not forget to add the final PMT.

alternatively, using the example provided by fellow Mukul:

5 annual payment amounting to $200 made during the beginning of the each year and invest at rate of 6%.

Using END Mode:-

N = _ 5 _; i/y = 6; PMT = -200; FV = 0; CPT -> PV

PV= 842.47.

To convert END mode answer to BGN mode answer, simply multiply the PV calculated with END Mode by 1+r.

I.e. 842.47 X 1.06 = 893.02

To do a test check on the answer, try to use BGN mode to calculate the given information and I am sure that you will get $ 893.02.

The intuition is that, since the amount is paid/receive at the BEGINNING of the year, the discounting will only happen 4 times instead of 5 times as if the amount is paid/receive at the END of the year.

Hope this helps.