SOA Exam FM Sample Question 176
Study guide: Exam FM-2
A two-year loan of 100 is repaid with a payment of X at the end of the first year and 2X at the end of the second year. The annual effective interest rate charged by the lender is 8% in the first year and i in the second year. The annual effective yield rate for the lender is 10%.
Calculate i.
- A) 12.8%
- B) 12.9%
- C) 13.0%
- D) 13.1%
- E) 13.2%
Answer this question and see the worked solution