Time value of money practice
Unlimited questions, each generated and checked in code: future and present value, the deposit that reaches a goal, the fund that pays a retirement income, a loan payment and a real return. Work it on your financial calculator, check it, and see the inputs.
Work it out, then check.
The calculator inputs
| N | Number of periods: years, or months for a monthly loan |
|---|---|
| I/Y | Rate per period: the yearly rate, or the yearly rate divided by 12 for monthly |
| PV | The amount today; money you invest is entered as negative |
| PMT | The level payment each period |
| FV | The amount at the end |
| BGN or END | Payments at the start or at the end of each period |
Then use it on a client
On the exam the arithmetic serves a recommendation: how much to save for college, whether a retirement goal is funded, which loan to take. The free diagnostic and the lesson put it to work.
Questions people ask
What calculator can I use on the CFP exam?
CFP Board requires one or more battery-powered, non-programmable financial calculators. They are inspected before the exam, and you clear the memory before each section. CFP Board's calculator policy lists the details.
When do I use BGN mode?
When payments happen at the start of each period: rent, insurance premiums, tuition paid at the start of each year, or retirement income drawn at the start of each year. Deposits or payments at the end of each period use END mode.
How do I find an inflation-adjusted return?
Divide one plus the nominal return by one plus inflation and subtract one: (1.07 / 1.03) - 1 = 3.88%. Subtracting inflation (7% - 3% = 4%) slightly overstates it.
How many time value of money questions are on the CFP exam?
CFP Board does not say. Time value of money is topic B.12 in General Principles of Financial Planning, 15% of the exam, and the same arithmetic runs through education, retirement and investment questions.
Are the questions the same every time?
No. Each question is generated fresh, with its answer worked out in code, so you can practice as long as you like. Nothing is stored or sent.