- 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
You are trying to accumulate $5,000 in a savings account. The savings account pays 4% per year and you plan to make yearly deposits of $416.45 at the end of each year. How many yearly deposits must you make?
B. 12
C. 15
A. 10
B. 12
C. 15
Correct Answer: A
By calculator: PMT = -$416.45; i = 4%; FV = $5,000.00; CPT n = 10
User Contributed Comments 7
| User | Comment |
|---|---|
| irutschka | My calculator somehow gives 8 as an answer. Anybody has the same? |
| irutschka | Sorry, everything is fine with 10 ;)) |
| cptp | I got 9.68, hence 10 is correct. |
| airborne | the answer is 10.0001 everything is OK |
| Bevin | Don't forget to put END in your calculator. I forgot the first time and got 9.68. Once I changed, I got 10. |
| swinter44 | If you're having trouble coming up with the correct answer, check to ensure that you don't have P/Y set to a number other than 1 from a previous question. |
| uhupong | Good reminding Bevin. Those who set cal with BEG and got 9.68 just got lucky this time. |