Why this is mistaken
At a positive rate, moving every payment one period earlier changes its value.
Draw both timelines and pair payments one by one. The due stream equals the
otherwise identical ordinary stream multiplied by 1+i; it does not contain
an extra payment.
Where to watch
When this mistake may appear
- A contract says payments are due in advance or in arrears.
- Two equal streams differ only in first-payment date.
Check your work
Your work may contain this mistake if:
- Uses the ordinary-annuity factor for a payment at t = 0.
- Adds payments at both t = 0 and t = n while retaining n as the payment count.