SOA Exam FM Sample Question 282
Study guide: Exam FM-2
A loan of amount a_{\overline{4}|i} is repaid with payments of 1 at the end of each year for four years. The sum of the interest paid in the last two years is equal to (1+i)^2 times the sum of the principal repaid in the first two years.
Calculate i.
- A) 0.543
- B) 0.567
- C) 0.592
- D) 0.618
- E) 0.645
Answer this question and see the worked solution
Concepts tested
- Loan Amortization
- Amortization
- Principal
- Interest
- Time Value of Money
- Compound Interest
- Present Value
- Effective Rate
- Discount Factor