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Basic Question 6 of 6
The following end-of-month payments of $400, $700, and $300, respectively, are due. Given a stated annual interest rate of 3.60 percent, the minimum amount of money needed in an account today to satisfy these future payments is closest to ______.
B. $1,327
C. $1,368
A. $1,391
B. $1,327
C. $1,368
User Contributed Comments 9
| User | Comment |
|---|---|
| tomalot | Method one gives a NPV of 1,322.709. Method 2 seems correct. Confused! |
| lordcomas | Does anyone has an idea where to find a tutorial for using cashflows with the TI BAII plus? |
| bwhitele | Why is the solution using i = 0.3 and not 0.36? |
| myron | because it's the monthly interest rate @bwhitele |
| ashish100 | Yeah, issue as lordcomas. How do i add the "I" on BAII plus? Thanks in advance. |
| IvanRios | 3.6%/12months = .3/per month. That is why I = 0.3 |
| Sagarsan88 | I get an npv of 1396.11...i used the CF method on calc....any clue why the nos don't match...thank you |
| nadiahalus | For BA II: 2nd.CF. CF0=0. ARROW DOWN. C01=400.ENTER.F01=1. C02=700.ENTER.F02=1. C03=300.ENTER.F03=1. PRESS NVP.I=0.3.ENTER.ARROW DOWN.NVP=1391.94 CORRECT ANSWER A. |
| Bishlawy | Hello! I am not able to download notes as PDF, any ideas? |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
calculate and interpret the present value(PV) of fixed-income and equity instruments based on expected future cash flows
calculate and interpret the implied return of fixed-income instruments and required return and implied growth of equity instruments given the present value (PV) and cash flows
CFA® 2025 Level I Curriculum, Volume 1, Module 2.