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When in question they say, payment starts from end of year 1 will it come
In year 1 or year 2?When discounting, time 0, time 1 etc are not years. They are points in time that are 1 year apart.
Time 0 is the start of the first year.
Time is 1 the end of the first year / start of the second year
Time 2 is the end of the second year / start of the third year
etc..Therefore a flows at the end of the first year is at time 1 and needs 1 year discounting.
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