SOA Exam FM Sample Question 84
Study guide: Exam FM-2
An insurance company purchases a perpetuity-due providing a geometric series of quarterly payments for a price of 100,000 based on an annual effective interest rate of i. The first and second quarterly payments are 2000 and 2010, respectively.
Calculate i.
- A) 10.0%
- B) 10.2%
- C) 10.4%
- D) 10.6%
- E) 10.8%
Answer this question and see the worked solution
Concepts tested
- Geometric Increasing Perpetuity
- Geometric Increasing Annuity
- Perpetuity
- Present Value
- Geometric Progression
- Non-level Annuities