- CFA Exams
- CFA Level I Exam
- 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**

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

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**User Contributed Comments**
2

User |
Comment |
---|---|

sheenalim |
how do I compute with a calculator? |

drew2009 |
PMT = -100 (Cash Outflow) N= 20 I/Y= 8 CPT FV |