SOA Exam FM Sample Question 23
Study guide: Exam FM-2
Ron is repaying a loan with payments of 1 at the end of each year for n years. The annual effective interest rate on the loan is i. The amount of interest paid in year t plus the amount of principal repaid in year t+1 equals X.
Determine which of the following is equal to X.
- A)
1+\dfrac{v^{n-t}}{i} - B)
1+\dfrac{v^{n-t}}{d} - C)
1+v^{n-t}\,i - D)
1+v^{n-t}\,d - E)
1+v^{n-t}
Answer this question and see the worked solution