SOA Exam FM Sample Question 377
Study guide: Exam FM-2
A bank offers a loan to each of two borrowers with different credit scores. Both loans are for the same amount.
The first borrower is charged a monthly effective interest rate of 1% and makes level end-of-month payments of X for n months to pay off the loan.
The second borrower is charged a monthly effective interest rate of 2.01% and makes level end-of-month payments of 2.01X for 200 months to pay off the loan.
Calculate n.
- A) 200
- B) 250
- C) 300
- D) 350
- E) 400
Answer this question and see the worked solution