On what base they have to calculate the monthly return and convert it to yearly return? The contributions are yearly and the time horizon is 10 years, and asking for yearly return. You would think just calc the yearly return based on what is provided?
Contributions aren’t yearly though. It’s stated in the case that they’re made in equal monthly installments. So we have to divide the PMT by 12 and multiply N by 12. Then convert the return output back to an annual amount. This one was a bit tricky as it had a couple of twists I hadn’t seen before. I had the contribution frequency right but I blew the FV as I didn’t account for the home properly.
This got me too. For IPS questions they are probably some of the easiest calculations for the exam. However, you have to read every single detail because they will throw in small tid bits of information like that to throw you off.
Happy IPSing
I’m on the other side- got the FV correct but missed the monthly frequency.
I personally feel 2016 is harder than previous years - quite some tricky questions that can be easily missed. Reading the entire context in a time constrained mode is hard too - I missed quite a few details that cost me entire points.
This was a really hard test, I skipped last year for personal reasons and taking that AM made me kinda happy I did. Ended up getting a 73% but went 5 min over time and felt like garbage after. I didn’t expect to given all the pitfalls they through in there but I actually nailed that question somehow.
The trick, as JayWill mentioned, was to just convert all the variables to monthly, CPT->I/Y and then annualize using x^12
Right, I totally missed those words “in equal monthly installments” which didn’t get me the exact number. 73 is pretty good, how many mocks have you done so far?