Can someone please explain to me how we would calculate this using the BA 2 Plus calculator - because I cannot seem to get the right answer for the annuity.
The answer is meant to be = 2,267,119.05
Though I always seem to get something much bigger.
Immediate annuity plus payment today:
P/Y=C/Y=1
END
2nd CLR TVM
19 N 7 I 200000 PMT CPT PV -2,067,119.049
Add payment made today = 2,067119.049 + 200,000 = 2,267,119.049
Annuity due
P/Y=C/Y=1
BGN
2nd CLR TVM
20 N 7 I 200000 PMT CPT PV -2,267,119.049
An n-year annuity due is equivalent to an immediate annuity for n-1 years plus a payment today. 
2 Likes
Thank you, Thank you, Thank you!! 
Maybe I’m looking at it wrong but considering that with Option 1 (lumpsum), as of T0, I could be investing the $2m at 7% interest (compounded) over 20 years, wouldn’t this option provide a greater PV?
I’m assuming you mean FV instead of PV.
What if we invest the annuity payments at 7%: what is its FV? 