Use These Shortcuts to Help with the CII R02 Exam

If you are taking the CII R02 exam and struggling with Chapter 5  (equally helpful for J10 and AF4), then here are a couple of short cuts you may or may not be aware of.

Question:

Georgia invests £10,000. The investment grows at 5% per annum. How much is it worth after 5 years?

This is a common exam question. You can, of course, use your scientific calculator – if you have one – but if like a lot of us you just have your old faithful manual one, here are four easy steps to working this through:

Step 1 – enter the interest rate as a decimal plus 1 – so 1.05.

Step 2 – press the multiplication key (once or twice depending on your calculator, you will need to experiment).

Step 3 – enter present value £10,000.

Step 4 – press the = button the number of times that matches the number of time periods.

The answer is £12,763.

And if you need to do a discounting calculation:

Question

Georgia made an investment 5 years ago, which has grown by 5% per annum and is now worth £12,763.  How much did she originally invest? 

Step 1 = enter the future value of £12,763 into your calculator.

Step 2 = press (divide) once or twice depending on your calculator (experiment to see what works).

Step 3 = enter the interest rate as a decimal plus 1 – i.e. 1.05.

Step 4 = press the = button the number of times that matches the number of time periods i.e. 5.

The answer is £10,000.

Chapter 5 may only be worth a few marks in R02, but why not ensure you get them by using these quick shortcuts?

Grab the resources you need!

If you’re studying for your CII R02 exam, and you’re wondering how you’ll manage to pull off a pass on exam day, grab our free taster to try out one of Brand Financial Training’s mock exam papers for yourself.  Click the link to download the R02 mock exam taster now!

Alternatively, you can download the taster for AF4, J10 or R06 if any of those exams is causing you to worry.