- CFA Exams
- CFA Exam: Level I 2021
- Study Session 2. Quantitative Methods (1)
- Reading 6. The Time Value of Money
- Subject 4. The Future Value and Present Value of a Series of Equal Cash Flows (Ordinary Annuities, Annuity Dues, and Perpetuities)

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**CFA Practice Question**

You expect to receive a series of annual payments forever. The present value of this series of payments is $10,000. If these payments can be invested at a rate of 15% per year, what is the amount of each cash flow?

B. $1,500.00

C. infinite

A. $666.67

B. $1,500.00

C. infinite

Correct Answer: B

A = (PV)(r) = (10,000.00)(.15) = 1,500.00

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