CFA® Level 1: Calculate Present Value

Calculate Present Value

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Question

How much must you deposit today if you wish to have $30,000 in 20 years, assuming that interest accumulates at 8% per year, compounded annually?

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Explanations

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A

On the BAII Plus, press 20 N, 8 I/Y, 0 PMT, 30000 FV, CPT PV. On the HP12C, press 20 n, 8 i, 0 PMT, 30000 FV, PV. Note that the answer is displayed as a negative number. Make sure that the BAII Plus has the P/Y value set to 1.