SOA Exam FM Sample Question 45
Study guide: Exam FM-2
You are given the following information about a loan of L that is to be repaid with a series of 16 annual payments:
(i) The first payment of 2000 is due one year from now.
(ii) The next seven payments are each 3% larger than the preceding payment.
(iii) From the 9th to the 16th payment, each payment will be 3% less than the preceding payment.
(iv) The loan has an annual effective interest rate of 7%.
Calculate L.
- A) 20,689
- B) 20,716
- C) 20,775
- D) 21,147
- E) 22,137
Answer this question and see the worked solution