SOA Exam FM Sample Question 364
Study guide: Exam FM-2
Consider an amortization schedule for a loan at interest rate i per period, i > 0, being repaid with payments of 1 at the end of each period for n periods.
Determine which of the following statements about this schedule is true.
- A) The total interest paid equals
n - a_{\overline{n}|}. - B) The total interest paid equals
ia_{\overline{n}|}. - C) The total principal repaid equals
n - ia_{\overline{n}|}. - D) The principal repaid in payment
tequalsv^{n-t}. - E) The total payment amount equals
a_{\overline{n}|}.
Answer this question and see the worked solution