SOA Exam FM Sample Question 16
Study guide: Exam FM-2
David can receive one of the following two payment streams:
(i) 100 at time 0, 200 at time n years, and 300 at time 2n years
(ii) 600 at time 10 years
At an annual effective interest rate of i, the present values of the two streams are equal.
Given v^n = 0.76, calculate i.
- A) 3.5%
- B) 4.0%
- C) 4.5%
- D) 5.0%
- E) 5.5%
Answer this question and see the worked solution