SOA Exam FM Sample Question 4
Study guide: Exam FM-2
A perpetuity costs 77.1 and makes end-of-year payments. The perpetuity pays 1 at the end of year 2, 2 at the end of year 3, …, n at the end of year (n+1). After year (n+1), the payments remain constant at n. The annual effective interest rate is 10.5%.
Calculate n.
- A) 17
- B) 18
- C) 19
- D) 20
- E) 21
Answer this question and see the worked solution