- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 6. The Time Value of Money
- Subject 3. The Future Value and Present Value of a Single Cash Flow

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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?

B. $167.28

C. $167.51

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 I/Y=6 PV=-125 PMT=0 => 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 +. |