CFA® Level 1: Compound Interest Calculation

Compound Interest Calculation

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Question

How much will you have in an account two years from now if you start with $100 in it today and add $300 to it one year from now? Assume that interest is 6% per year, compounded annually.

Answers

Explanations

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Explanation

Solve this question by working 2 compound interest problems. On the BAII Plus, press 2 N, 6 I/Y, 100 PV, 0 PMT, CPT FV, which yields $112.36. Then press STO

1. Then press 1 N, 300 PV, CPT FV, which yields $318.00. To find the answer, press + RCL 1 =. On the HP12C, press 2 n, 6 i, 100 PV, 0 PMT, FV. Then press

STO 1. Then press 1 n, 300 PV, FV. Then press RCL 1 + to show the answer.

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