SOA Exam FM Sample Question 160
Study guide: Exam FM-2
A 20-year arithmetically increasing annuity-due sells for 600,000 and provides annual payments. The first payment is X, and each payment thereafter is X more than the previous payment.
A 25-year arithmetically increasing annuity-due provides annual payments. The first payment is X, and each payment thereafter is X more than the previous payment.
The prices of the two annuities are calculated using a continuously compounded annual interest rate of 6%.
Calculate the price of the 25-year annuity.
- A) 667,026
- B) 668,707
- C) 750,000
- D) 779,336
- E) 782,712
Answer this question and see the worked solution