- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 4. Annualized Return
CFA Practice Question
If you are given a present value, the length of time the money is to be invested, compounding interval, and the future value of the investment, you can solve for the interest rate that was earned on the investment. True or False?
Correct Answer: True
User Contributed Comments 5
| User | Comment |
|---|---|
| 0is4eva | PV * (1+r/m)^N = FV (1+r/m)^N = FV/PV (1+r/m) = (FV/PV)^(1/N) r = m * ( (FV/PV)^(1/N) - 1 ) |
| jlevee | Just look at the TVM buttons on your calculator. If you have all but one you can do it... |
| sunxx320 | I think 0is4eva's formula is not right. FV=PV*(1+r/m)^(N*m), so r=m*((FV/PV)^(1/Nm)-1). |
| khalifa92 | the door heaven widely open yet you guys knocking to hells' door |
| alichattoo | Technically you do not have the payment |