SOA Exam FM Sample Question 87
Study guide: Exam FM-2
A company takes out a loan of 15,000,000 at an annual effective discount rate of 5.5%. You are given:
- i) The loan is to be repaid with
nannual payments of 1,200,000 plus a drop payment one year after thenth payment. - ii) The first payment is due three years after the loan is taken out.
Calculate the amount of the drop payment.
- A) 79,100
- B) 176,000
- C) 321,300
- D) 959,500
- E) 1,180,300
Answer this question and see the worked solution
Concepts tested
- Loan Amortization
- Loans
- Amortization
- Effective Discount Rate
- Principal
- Term of Loan
- Drop Payment
- Final Payment