- 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
What is the future value of the following regular (ordinary, deferred) annuity?
Payment frequency = annual, at the end of each year
Number of payments = 20
Interest rate = 8% per year
Payment amount = $100
Payment frequency = annual, at the end of each year
Number of payments = 20
Interest rate = 8% per year
A. $4,750.00
B. $4,576.20
C. $2,160.00
Explanation: FV = 100(1.08)19 + 100(1.08)18 + 100(1.08)17 + ... + 100(1.08)1 + 100(1.08)0 = $4,576.20
User Contributed Comments 2
User | Comment |
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sheenalim | how do I compute with a calculator? |
drew2009 | PMT = -100 (Cash Outflow) N= 20 I/Y= 8 CPT FV |