CFA CFA Level 1 Simple Annuity Question driving me crazy!

# Simple Annuity Question driving me crazy!

• Author
Posts
• ntmniall
Participant
• CFA Level 1
0

Hi all,

Can someone please help me with the below.

If I invest 2,000,000 today at a rate of 1.14% for 10 years. I will have 2,240,059.16 at the end of the 10 years. Equivalent to receiving 10 payment of 24,005.94

How much would I need to invest at the same rates, to earn 74,000 per year, for 10 years??

Thanks : )

• AdaptPrep
Participant
• Undecided
4

\$695,642. Enter the following into your calculator:
N = 10
I = 1.14
PMT = -74,000
FV = 0
Calculating PV should give you what you need. There’s a formula as well you can use, but the calculator should suffice for what you need on the exam.

• PaulAdaptPrep
Participant
• Undecided
4

We have a calculator guide that may also be helpful for learning these functions:
https://www.youtube.com/watch?list=UU8DNfSlObTQsdz0rOWB2-0A&v=Ehchb6Zvag0

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