Resend: Loan payments vs financial calculator mismatch

[Mike or Penny Novack]

>I guess it still is.  But "fencepost error" seems to be what landed in
>the "Hackers Dictionary" (http://www.ccil.org/jargon/jargon_21.html).
>Wikipedia does list 'telegraph pole' and 'lamp-post' error as
>alternitive terms:
>
>http://en.wikipedia.org/wiki/Fencepost_error#Fencepost_error
>
>  
>
OK, but the cause? In this case the first thing I would check is the 
right formula (computation process) being used for the wrong type of 
"annuity" (series of
"rents") in computing the "present value at some discount rate" -- 
sorry, but that are the terms used and there isn't really a difference 
between paying X now to receive a series of future payments (what we 
call an "annuity") or agreeing to make a series of payments in exchange 
for the loan principle now (what we call an "amortized loan"), just 
which side of the transaction you are on.

There are two kinds of annuities, one in which you receive (or make) the 
first payment immediately and the other in which you receive (or make) 
that first payment the end of the first interval and these two are off 
by exactly one period in computing the present value. An amortized loan 
is normally of the second sort.

Michael D Novack, FLMI

(and ROFLOL, exactly the sort of thing I had to learn getting my FLMI 
designation)