# CFA Level I Question

How do you solve for r? Can you show all your work?

((5)/(1+r)) + ((5+100)/(1+r)^{2}) = 101.7

Thanks!

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How do you solve for r? Can you show all your work?

((5)/(1+r)) + ((5+100)/(1+r)^{2}) = 101.7

Thanks!

Share this

Join the world's largest online community of CFA, CAIA and FRM candidates.

Multiply everything by (1 +

r)^{2}:[5 / (1 +

r)](1 ++ [(5 + 100) / (1 +r)^{2}r)^{2}](1 += 101.7r)^{2}(1 +r)^{2}5(1 +

r) + 105 = 101.7(1 + 2r+r^{2})5 + 5

r+ 105 = 101.7 + 203.4r+ 101.7r^{2}101.7

r^{2}+ 198.4r− 8.3 = 0Then, use the quadratic formula:

r= [198.4 ± √(198.4^{2}− 4(102.7)( −8.3))] / [2(101.7)]=

4.0974%, −199.1810%Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams

http://financialexamhelp123.com/

Although it’s nice to know how to do this manually, you don’t need to do this manually during the exam, the calculator does all the heavy lifting.

Many here would disagree with you on this point.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams

http://financialexamhelp123.com/

That was my nice way of saying don’t waste your time :P.

They most definitely would agree with you on that one.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams

http://financialexamhelp123.com/

Your calculator is the only friend you will be allowed to bring in to the exam room.

“Mmmmmm, something…” - H. Simpson

Is there a way quicker way to solve the equation?

No.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams

http://financialexamhelp123.com/

Manually? Oh, heck no. S2000magician is on the money there.

Calculatorally? Oh my heavens, yes. There is lovely TVM and CF functionality that will free up oodles of time and neurons!!!!

“Mmmmmm, something…” - H. Simpson