SOA Exam FM Sample Question 408
Study guide: Exam FM-2
You are given the following table of spot rates to calculate the present value of a level four-year annuity-immediate:
| Length of investment in years | Spot rate |
|---|---|
| 1 | 4.25% |
| 2 | 4.50% |
| 3 | 4.75% |
| 4 | 5.00% |
Calculate the annual effective interest rate for this annuity.
- A) 4.52%
- B) 4.63%
- C) 4.74%
- D) 4.85%
- E) 4.87%
Answer this question and see the worked solution