SOA Exam FM Sample Question 75
Study guide: Exam FM-2
A couple decides to save money for their child's first year college tuition.
The parents will deposit 1700 n months from today and another 3400 2n months from today.
All deposits earn interest at a nominal annual rate of 7.2%, compounded monthly.
Calculate the maximum integral value of n such that the parents will have accumulated at least 6500 five years from today.
- A) 11
- B) 12
- C) 18
- D) 24
- E) 25
Answer this question and see the worked solution
Concepts tested
- Time Value of Money
- Time Value of Money Equations
- Present Value
- Equation of Value
- Effective Rate
- Discount Factor