Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 0 of 6
You expect to receive annual payments of $425 per year forever. If these payments can be invested at the rate of 11% per year, what is the present value of this perpetuity?
User Contributed Comments 4
User | Comment |
---|---|
Ratego | PV=A/r A=425 r=.11 |
8thlegend | After going through 11 of these problems, I wished that all the CFA questions were like these. |
Yrazzaq88 | BA calculator: PMT = -425 I/Y = 11% N = 100 =3863.52 |
assiduous | Another way to look at it.... Suppose you were living off of interest. If your money was invested at an annual rate of 11%, how much money would you need TODAY in order to yield $425 every year forever? The answer is always: [desired amt per period] / [rate of return per period] |

I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.

Tamara Schultz
Learning Outcome Statements
calculate and interpret the present value(PV) of fixed-income and equity instruments based on expected future cash flows
calculate and interpret the implied return of fixed-income instruments and required return and implied growth of equity instruments given the present value (PV) and cash flows
CFA® 2025 Level I Curriculum, Volume 1, Module 2.