SOA Exam FM Sample Question 348
Study guide: Exam FM-2
You are given the following information regarding two annuities with annual payments:
i) Annuity X is a 20-payment annuity-immediate which provides an initial payment of 2500 and each subsequent payment is 5% larger than the preceding payment.
ii) Annuity Y is a 30-payment annuity-due which provides an initial payment of k and each subsequent payment is 4% larger than the preceding payment.
Using an annual effective interest rate of 4%, Annuity X and Annuity Y have the same present value.
Calculate k.
- A) 1,758
- B) 1,828
- C) 1,901
- D) 2,078
- E) 2,262
Answer this question and see the worked solution