CFA® Level 1: Simple Interest Calculation

Simple Interest Calculation

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Question

If you deposit $2,500 into an account paying 6% per year, simple interest, how much is in the account in 18 months?

Answers

Explanations

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A. B. C. D. E.

B

Since the question asks for how much is in the account, the simple interest earned should be added to the original deposit to find the answer. On the BAII Plus, press 2500 x 0.06 x 18 divide 12 = + 2500 =. On the HP12C, press 2500 ENTER 0.06 x 18 x 12 divide 2500 + to see the answer.