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CFA Institute Exam CFA-Level-I Topic 1 Question 12 Discussion

Actual exam question for CFA Institute's CFA-Level-I exam
Question #: 12
Topic #: 1
[All CFA-Level-I Questions]

If you have $5,000 in an account today and withdraw $2,000 in 3 years, how much can you withdraw from the account in 5 years, if the account earns interest at 8% per year, compounded annually?

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Suggested Answer: C
by Arlette at Jan 23, 2025, 05:22 PM

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King
2 days ago
This seems like a straightforward interest calculation problem. I just need to figure out the balance after 5 years and then subtract the $2,000 withdrawal. Easy peasy!
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Martina
8 days ago
Exactly, we can use the formula A = P(1 + r)^n to calculate the future value of the account.
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Monroe
9 days ago
Okay, let's see. If I have $5,000 and withdraw $2,000 in 3 years, and the account earns 8% interest annually, that means I'll have more than $5,000 left in 5 years. I'll just need to calculate the exact amount.
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Pearlene
14 days ago
Yes, we can use the formula for compound interest to find out how much we can withdraw in 5 years.
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Martina
15 days ago
I think we need to calculate the future value of the account.
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