- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 4. Annualized Return
CFA Practice Question
At what rate of interest must I invest a sum of money if I want to double my investment in 14 years time and if the interest is compounded annually?
A. 0.05076%
B. 5.08%
C. 0.05%
Explanation: Using Texas Instruments BA II Plus:
1 ± PV: PV = -1.00
2 FV: FV = 2.00
14 N: N = 14.00
CPT I/Y: I/Y = 5.08
f CLEAR FIN: 0.000000000
f CLEAR REG: 0.000000000
14 n: 14.00000000
5 CHS PV: -5.00000000
15 FV: 10.00000000
i: 5.07566387
1 ± PV: PV = -1.00
2 FV: FV = 2.00
14 N: N = 14.00
CPT I/Y: I/Y = 5.08
Using Hewlett Packard hp 12 C:
f CLEAR FIN: 0.000000000
f CLEAR REG: 0.000000000
14 n: 14.00000000
5 CHS PV: -5.00000000
15 FV: 10.00000000
i: 5.07566387
Note: You can put in any value for PV as long as you put in twice this value for FV.
User Contributed Comments 1
User | Comment |
---|---|
Sunny31 | Rule 72 |