CFA Practice Question

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CFA Practice Question

You have received $125 today. You will invest the money at a rate of 6% per year. How much will your investment have increased to by the end of 5 years?

A. $159.54
B. $167.28
C. $167.51
Correct Answer: B

FV = (125)(1.06)5 = 167.28

User Contributed Comments 5

User Comment
chuong N=5
=> FV = 167.28
Nathan I find it's easiest and fastest to work these problems by first entering 1.06<sup>5</sup>. On the TI BAII+ that's 1.06 [<i>y<sup>x</sup></i>] 5 . Then I multiply by 125 to get the final answer. It's faster than using the TVM registers and you should memorize these TVM formulae.
Indira Using TI BAII
1.06 {yX} 5 * 125.
Metalpro I am using TA BA II calculator. I am getting the negative answer whenever i calculate the answer. Dose any one knows why this happen?
Kaloyan To Metalpro: This is because you input the PV of 125 with a positive sign. Try with -125 instead. It is the logic of the calculator. Remember: money you pay (savings, retirement...) are written with a -. Money you get (loan, salary..) come with a +.
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