- 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 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

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**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. |