SOA Exam FM Sample Question 433
Study guide: Exam FM-2
Interest on a 20-year loan is charged based on an annual effective rate of 10.1%.
The loan is repaid by payments of 100 at the end of each of the years 1 through 5 and each of the years 11 through 20. During years 6 through 10 no payments are made.
Calculate the absolute value of the difference between the outstanding balance immediately after the payment in year 5 and the outstanding balance immediately after the payment in year 15.
- A) 0
- B) 142
- C) 144
- D) 234
- E) 378
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