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**CFA Practice Question**

What single deposit could you make today in order to have $1,000,000 in 30 years, assuming it earns interest at 11% per year, compounded monthly?

A. $9,523.23

B. $37,441.83

C. $43,682.82

**Explanation:**On the BAII Plus, press 360 N, 11 divide 12 = I/Y, 0 PMT, 1000000 FV, CPT PV. On the HP12C, press 360 n, 11 ENTER 12 divide i, 0 PMT, 1000000 FV, PV. Note that the answer is displayed as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.

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**User Contributed Comments**
7

User |
Comment |
---|---|

lwang014 |
"compounded monthly" is the key |

bawejate |
or you can go 36 N FV 1000,000 PMT 0 I/Y 11 P/Y set to 12 PC CPT= 37,441 |

Frehner |
bawejate means 30 N not 36 N |

kellyyang |
36N is right! You know 30*12=360 N , remember is monthly ! |

MylesGrenier |
I just found the monthly compounded EAY and put that in I/Y. So (1 + [.11/12])^12 - 1 = 11.57188% |

JeffAu |
If you do it the way Bawejate is doing, N needs to be 360 not 36. |

abs013 |
BAIIPlus N= 30 * 12 = 360 I/Y= 11/12 = 0.9167 FV= 1,000,000.00 CPT PV = -37,441.83 |