CFA Practice Question

There are 410 practice questions for this study session.

CFA Practice Question

Rent is $700.00 monthly and is due on the first day of every month. If the stated annual interest rate is 6 percent, the present value of a full year's rent payments is closest to ______.
A. $8,123
B. $8,173
C. $8,203
Explanation: Using a financial calculator: PMT = 700, I=0.5, n=12 Compute annuity due PV, PV = 8,173.92

User Contributed Comments 2

User Comment
idzani Keyword: on the first day of everymonth. Set BGN mode.
JohnOyo In the texas calculator I am putting:
PMT = -700
N = 12
I/Y = 6/12 = 0.5
CPT PV = 8133.25245

Okay I figured it out... Thanks to the comment above

To change to BGN (beginning of period)
2nd BGN to select BGN/END screen
2nd SET to change to BGN (BGN should now show))

Recalculated and got 8173.91871
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