SOA Exam FM Sample Question 126
Study guide: Exam FM-2
A borrower takes out a loan of 4000 at an annual effective interest rate of 6%.
Starting at the end of the fifth year, the loan is repaid by annual payments, each of which equals 600 except for a final balloon payment that is less than 1000.
Calculate the final balloon payment.
- A) 616
- B) 639
- C) 642
- D) 688
- E) 696
Answer this question and see the worked solution
Concepts tested
- Loan Amortization
- Loans
- Amortization
- Outstanding Balance
- Principal
- Term of Loan
- Balloon Payment
- Final Payment