Does anybody understand this explanation from CFA Study Guide from our Candidate Resources?
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You mean the TVM problem? I found the explanation a bit confusing as well.
To calculate yearly funding, first discount the 1.3 million in 15 years to PV today: N 15, I/Y 3, FV 1300000, CPT PV = 834420. Now you calculate an annuity due with this PV. Set your calculator to BGN mode (remember it says funding starts immediately). Then: N 4, I/Y 3, PV 834420, CPT PMT = 217943.
oh Thank you!
You’re welcome.