Question 1

What is the difference between beginning and end of period?

Accepted Answer

End of period (an ordinary annuity) assumes each payment lands at the close of the period, which is how a mortgage works — your first payment is due a month after closing. Beginning of period (an annuity due) assumes payment at the start, which is how rent and most leases work. The beginning-of-period value is simply the ordinary value divided by one plus the periodic rate, so it is always slightly larger.

Question 2

Why is my answer negative?

Accepted Answer

This uses the standard financial sign convention: money flowing toward you is positive and money flowing away is negative. A loan's present value and its payments therefore carry opposite signs. If every number you entered had the same sign, the solver has nothing to balance and will say so rather than guess.

Question 3

Why can't it always solve for the rate?

Accepted Answer

Rate has no algebraic solution, so it is found by iteration. If the cash flows never change sign there is no rate that makes them balance, and if they change sign more than once there can be several. In both cases you get a warning instead of a number — a plausible-looking rate that does not really exist is worse than no answer.

Solve for any one of payment, rate, term, present value, or future value