CFA CFA Level 1 TVM Anyone has methods/exercices for easily solving annuity due problems?

TVM Anyone has methods/exercices for easily solving annuity due problems?

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      Hello everyone!!

      Question on TVM

      I’d be glad to have a good technique to easily solve annuity due problems
      (Diagrams, etc)

      Thx

    • Avatar of vincenttvincentt
      Participant
        • CFA Level 3
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        Hi @chewbaKa‌ , are you referring to the calculation of FV for annuity due?

        In case you are, there are 2 approaches to this:

        1. To use the BGN, and do your calculation as though it’s a normal FV calculation (non annuity due):

        Steps to switch between BGN and END

        • Press [2ND] [BGN] to display the BGN/END worksheet. (Resetting the unit sets this to END, not BGN.)
        • Press [2ND] [SET] to change to beginning-of-period payments. BGN is displayed.
        • Press [2ND] [SET] again to return the setting to end-of-period payments. END is displayed.
        • Press [2ND] [QUIT] to exit.

        2. To multiply the non-annuity due’s FV by the rate for the period.

        For example:
        N = 10; Rate = 9%

        After computing the FV, you just multiply FV by 1.09 to get the FV for annuity due.

        My preferred method as it’s much quicker.

      • Avatar of mitch895mitch895
        Participant
          • CFA Charterholder
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          Agree with @vincentt – get to know your calculator. Once you get the hang of which buttons/functions do what, you’ll save a bucket load of time (and there’s less chance you’ll stuff something up).

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          sure. after practicing, doesnt seem that hairy to me (and i’m chewbaka 😉 )

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