SOA Exam FM Sample Question 403
Study guide: Exam FM-2
At the beginning of a year, Rachael invests 10,000 in Fund X earning an annual nominal interest rate of 9% convertible quarterly.
At the end of the year and each successive year, she withdraws the accumulated interest from Fund X and reinvests it into Fund Y, earning an annual effective interest rate of i.
The balance of Fund Y immediately after the fifth interest deposit is 5461.
Calculate i.
- A) 7.9%
- B) 8.0%
- C) 8.1%
- D) 8.2%
- E) 8.3%
Answer this question and see the worked solution