SOA Exam FM Sample Question 64
Study guide: Exam FM-2
A borrower takes out a 50-year loan, to be repaid with payments at the end of each year. The loan payment is 2500 for each of the first 26 years. Thereafter, the payments decrease by 100 per year. Interest on the loan is charged at an annual effective rate of i (0\% < i < 10\%). The principal repaid in year 26 is X.
Determine the amount of interest paid in the first year.
- A)
Xv^{25} - B)
2500v^{25} - Xv^{25} - C)
2500 - X - D)
2500 - Xv^{25} - E)
25Xi
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