SOA Exam FM Sample Question 415
Study guide: Exam FM-2
Loan A is a 96-month loan with an annual nominal interest rate of 7.2% compounded monthly. This loan is repaid with equal payments of m at the end of each of the first 48 months followed by payments of 1.5m at the end of each of the last 48 months.
Loan B is also a 96-month loan with the same annual nominal interest rate compounded monthly. This loan is repaid with equal payments of 1.2m at the beginning of each of the first 48 months followed by payments of 0.9m at the beginning of each of the last 48 months.
Calculate the ratio of the amount of Loan A to the amount of Loan B.
- A) 1.127
- B) 1.133
- C) 1.145
- D) 1.152
- E) 1.190
Answer this question and see the worked solution