Rounding of "n" periods on a HP-12C - problem for the actual exam

CFA General
#1

Hello everyone,

Dec '12 Level 1 candidate here :slight_smile:

I have a HP 12C and when I am solving for number of periods in a TVM calculation I get a rounded (up) number. From looking online I understand this is the way the 12C is designed (unlike the BAII).

My question is simple - when I actually take the exam, what answer will be shown?

For example: If the question gives

PV = -100

FV = 200

i = 7%

and asks for N … the 12C will give the answer as “11” while the CFAI book shows the mathematically correct answer of 10.24 - which of these will appear on the exam given that the 12C is one of the official calculators?

Thanks in advance to all experienced test-takers for answering the question!

Magnus

#2

With BA II plus, I get 10.24476835. Moreover, as you said, “CFAI book shows the mathematically correct answer of 10.24”. Therefore, you need to choose the one closest to 10.24 on the exam. I don’t know what people with HP 12C do.

#3

Hi Eddie

Thanks for the response - given this type of question, what types of answers did you actually see on your exam - did CFAI actually give out both 10.24 AND 11 as possible answers?

I ask also because in some other CFAI model answers when solving for “n” they specifically state that “some calculators” will give a rounded response = they do not appear to be consistent …

#4

The CFAI knows this, most likely they would formulate a problem that doesn’t require rounding.

#5

Sorry, I did not have this problem. Therefore, I did not pay attention to situation like this.

#6

Hi gpmangus, I’ve got a HP 12C as well. You should have a look at the FAQ on the CFA Institute website regarding this issue. It says:

Should I be concerned that the HP 12C automatically rounds up when computing the time required to accumulate a given future value?

No. CFA Institute is aware that the HP 12C rounds up when computing the time required to accumulate a certain sum. We have taken that into consideration in the creation of questions and in the grading process.

Here’s a link to the FAQ: http://www.cfainstitute.org/utility/faq/Pages/index.aspx

#7

I’ve had a few answers where I’ve gotten something like say n=4.000369, would the 12c round that up to five? That works out to like…minutes on the year.

#8

I think the HP 12C should give you 4. What was the question?

#9

HP12c is garbage