CFA Level 1 Exam: Compound Interest Calculation

Compound Interest Calculation

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Question

If you deposit $250 a month, beginning next month, for 20 years into an account paying 7% per year, compounded monthly, how much is in your account after that last deposit?

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Explanations

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A. B. C. D. E.

E

On the BAII Plus, press 240 N, 7 divide 12 = I/Y, 0 PV, 250 PMT, CPT FV. On the HP12C, press 240 n, 7 ENTER 12 divide i, 0 PV, 250 PMT, FV. On the BAII

Plus, make sure the value of P/Y is set to 1. Note that the answer is displayed as a negative number.

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