SOA Exam FM Sample Question 262
Study guide: Exam FM-2
The first payment of a five-year annuity is due in five years in the amount of 1000. The subsequent four annual payments increase by 500 each year. The annual effective interest rate is i.
Determine which of the following formulas gives the present value of the annuity.
- A)
v^6\left[500a_{\overline{5}|i} + 500(Ia)_{\overline{5}|i}\right] - B)
v^6\left[500\ddot{a}_{\overline{5}|i} + 500(I\ddot{a})_{\overline{5}|i}\right] - C)
v^5\left[500a_{\overline{5}|i} + 500(I\ddot{a})_{\overline{5}|i}\right] - D)
v^5\left[500\ddot{a}_{\overline{5}|i} + 500(I\ddot{a})_{\overline{5}|i}\right] - E)
v^5\left[1000\ddot{a}_{\overline{5}|i} + 500(I\ddot{a})_{\overline{5}|i}\right]
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