AF rate: how we decide it's year 0 or year 1

For DCF calculations, we are looking at points in time that are 1 year apart. Time 0 is the start of the first year. Time 1 is the end of the first year / start of the second year, Time 1 is the end of the second year / start of the third year and so on. I really do suggest that you watch the free Paper MA (was Paper F3) lectures on interest and investment appraisal because this is essential revision from Paper MA.