SOA Exam FM Sample Question 393
Study guide: Exam FM-2
An annual perpetuity-due pays 20,000 for the first five years and 50,000 thereafter.
At an annual effective interest rate of 3% for the first five years and i thereafter, the present value of the perpetuity is 1,000,000.
Calculate i.
- A) 4.50%
- B) 4.75%
- C) 5.00%
- D) 5.50%
- E) 5.85%
Answer this question and see the worked solution