SOA Exam FM Sample Question 111
Study guide: Exam FM-2
Martha leaves an estate of 500,000. Interest on this estate is paid to John for the first X years at the end of each year. Karen receives annual interest payments from the end of year X+1 forever. At an annual effective interest rate of 5%, the present value of Karen's interest payments is 1.59 times the present value of John's.
Calculate X.
- A) 6
- B) 7
- C) 8
- D) 9
- E) 10
Answer this question and see the worked solution