SOA Exam FM Sample Question 236
Study guide: Exam FM-2
A perpetuity-immediate with annual payments is priced at X based on an annual effective interest rate of 10%. The amount of the first payment is 14,000. Each payment, from the second through the twentieth, is 4% larger than the previous payment. The 21st payment and each subsequent payment will be 1% larger than the previous payment.
Calculate X.
- A) 185,542
- B) 191,834
- C) 206,540
- D) 208,508
- E) 212,823
Answer this question and see the worked solution