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Basic Question 2 of 6
You have received $125 today. You will invest the money at a rate of 6% per year. How much will your investment have increased to by the end of 5 years?
B. $167.28
C. $167.51
A. $159.54
B. $167.28
C. $167.51
User Contributed Comments 5
| User | Comment |
|---|---|
| chuong | N=5 I/Y=6 PV=-125 PMT=0 => FV = 167.28 |
| Nathan | I find it's easiest and fastest to work these problems by first entering 1.06<sup>5</sup>. On the TI BAII+ that's 1.06 [<i>y<sup>x</sup></i>] 5 . Then I multiply by 125 to get the final answer. It's faster than using the TVM registers and you should memorize these TVM formulae. |
| Indira | Using TI BAII 1.06 {yX} 5 * 125. |
| Metalpro | I am using TA BA II calculator. I am getting the negative answer whenever i calculate the answer. Dose any one knows why this happen? |
| Kaloyan | To Metalpro: This is because you input the PV of 125 with a positive sign. Try with -125 instead. It is the logic of the calculator. Remember: money you pay (savings, retirement...) are written with a -. Money you get (loan, salary..) come with a +. |
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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® 2024 Level I Curriculum, Volume 1, Module 2.