Discussion
The present worth given by \( (P/A, i, n) \) is located
Answer: C
Correct answer: one period before the first payment
This is the convention that causes most of the errors in using the factor. The series present worth factor discounts the payments to the period immediately preceding the first of them, not to the date of the first payment. For an ordinary series beginning at the end of year one, that period is time zero, which is why it usually works out conveniently.
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