SOA Exam FM Sample Question 441
Study guide: Exam FM-2
At Jack's death, his estate of 298,000 is to be divided between Charity A and Charity B.
Charity A will receive 198,000 and use it to purchase a perpetuity-due that makes a payment of X every month.
Charity B will receive 100,000 and use it to purchase a perpetuity-due that makes a payment of X every two months.
The payments of X for each charity are based on an annual effective interest rate of i.
Calculate i.
- A) 21.5%
- B) 24.0%
- C) 24.5%
- D) 26.8%
- E) 27.4%
Answer this question and see the worked solution