what are some key words to watch out for that will tell you when to change your calculator setting to BGN. I know some problems that say “beginning of the year/at the start of the year/the 1st day of the month” and etc. are a good indication, however are there any other ones?
How would you answer this question?
Bill Jones is creating a charitable trust to provide six annual payments of $20,000 each, beginning next year. How much must Jones set aside now at 10% interest compounded annually to meet the required disbursements?
I think the problem is a little ambiguous. As for me, I would consider first payment on the beginning of next year, and set BGN to calculate the PV at the beginning of the second year and discount back one year to get the PV now. If no answer matches, I would calcalate END using the same method. If both answers are the choices, I think tossing a coin is a better idea.
Only use BGN mode if the problem says “Starting today” or “Starting immediately” or "Starting at the beginning of this…"
When it says starting today or immediately, then you know these are annuity due type of question, that is payment is due today or immediately.
When the problem says “Beginning next …” or “Starting at the end of this…” this implies that the payment is not due immediately so you use your END mode as usual.