SOA Exam FM Sample Question 175
Study guide: Exam FM-2
The following two annuities-immediate have the same present value at an annual effective interest rate of i, i > 0.
i) A ten-year annuity with annual payments of 475. ii) A perpetuity with annual payments of 400 in years 1-5, zero in years 6-10, and 400 in years 11 and beyond.
Calculate i.
- A) 10.65%
- B) 10.75%
- C) 10.85%
- D) 10.95%
- E) 11.05%
Answer this question and see the worked solution
Concepts tested
- Annuities
- Level Annuity
- Present Value
- Perpetuity
- Annuity Immediate
- Level Payment Annuity
- Term of Annuity