SOA Exam FM Sample Question 316
Study guide: Exam FM-2
A perpetuity-immediate with annual payments consists of ten level payments of k, followed by a series of increasing payments. Beginning with the eleventh payment, each payment is 200 larger than the preceding payment.
Based on an annual effective interest rate of 5.2%, the present value of the perpetuity is 50,000.
Calculate k.
- A) 34
- B) 86
- C) 163
- D) 283
- E) 409
Answer this question and see the worked solution