- CFA Exams
- CFA Level I Exam
- 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**

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

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**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. |