SOA Exam FM Sample Question 122
Study guide: Exam FM-2
A perpetuity-due with annual payments consists of ten level payments of X followed by a series of increasing payments. Beginning with the eleventh payment, each payment is 1.5% larger than the preceding payment.
Using an annual effective interest rate of 5%, the present value of the perpetuity is 45,000.
Calculate X.
- A) 1,679
- B) 1,696
- C) 1,737
- D) 1,763
- E) 1,781
Answer this question and see the worked solution