- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 2. Time Value of Money in Finance
- Subject 2. Fixed Income Instruments and the Time Value of Money
CFA Practice Question
A parent wants to save $50,000 for her daughter's education. She needs this amount in six years. How much does she need to begin saving a year from now, every year, if the savings can be invested at 5%?
A. 7,351
B. 7,001
C. 7,937
Explanation: Using a financial calculator: FV = 50,000; N = 6; I/Y = 5; CPT PMT = 7,351
User Contributed Comments 3
User | Comment |
---|---|
chcarnes | Ah, I discounted it back one year to get 7001 as she started saving it a year from now. |
nmech1984 | For some reason, my result is 7362... |
Aalhaddad2 | my result is 7827. |