SOA Exam FM Sample Question 298
Study guide: Exam FM-2
An annual perpetuity pays 1 one year from now. Payments will then increase by 4% per year for 5 years and 8% per year thereafter.
Calculate the present value of this perpetuity at an annual effective interest rate of 12%.
- A) 21.13
- B) 23.51
- C) 25.95
- D) 28.87
- E) 31.23
Answer this question and see the worked solution