SOA Exam FM Sample Question 285
Study guide: Exam FM-2
An investor deposits 1000 at the beginning of each year for 20 years. The fund earns interest at an annual effective rate of 9.25%.
At the end of 20 years, the investor wishes to use the fund to purchase a 30-year annuity-due with monthly payments of 500 based on an annual nominal interest rate of 10% convertible monthly.
Calculate the balance, if any, in the fund after paying for the annuity.
- A) The fund balance is insufficient to purchase the annuity.
- B) 0
- C) 35
- D) 370
- E) 510
Answer this question and see the worked solution