Page 18 - FINAL CFA SLIDES JUNE 2019 DAY 2

LOS 6.e: Calculate and interpret the FV & Session Unit 2: The Time Value of Money
PV of a single sum of money, an ordinary
annuity, an annuity due, a perpetuity (PV Solving TVM Problems When Compounding Periods Are Other Than Annual
only), and a series of unequal cash flows.

Using Financial Calculator:

Example: FV of a single sum using quarterly
compounding: Compute the FV of $2,000 today, five
years from today using an interest rate of 12%,
compounded quarterly.

Answer:
• N = 5 × 4 = 20; I/Y = 12 / 4 = 3; PV = –$2,000;
• CPT → FV = $3,612.22