Black Belt Tests – calculating NFV – test errors
February 3, 2006 at 8:35 am #42247
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In all the tests I have seen, a typical question would be;
If NPV is $1000 and assuming an interest rate of 10% calculate NFV for 5 years from now.
The answers always reflect some variables and yet the value is not able to be determined because there is insufficient data. Often a final choice in the answer options is ‘d) non of the above’, which would, in all cases, be the correct answer.
You cannot determine the net future value without knowing if the interest rate is payable monthly, quarterly, annually etc or whether it is simple interest or compound interest.
How many black belt candidates have failed or passed as a result of the poorly worded questions?0
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