CFA® Level 1: CFA® Level 1 Exam Question

John's Great-Grandfather's Account: Future Value Calculation

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Question

John's great-grandfather left him $50 when he died 80 years ago in an account paying 8% per year, compounded annually. How much would the account hold for

John now?

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Explanations

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E

On the BAII Plus, press 80 N, 8 I/Y, 50 PV, 0 PMT, CPT FV. On the HP12C, press 80 n, 8 i, 50 PV, 0 PMT, FV. Note that the answer will be displayed as a negative number. Make sure that the BAII Plus has the P/Y value set to 1.