Revision as of 10:38, 18 November 2023 by Admin (Created page with "'''Solution: A''' Present value for the first 10 years is <math display = "block">{\frac{1-\left(1.06\right)^{-10}}{\ln\left(1.06\right)}}=7.58 </math> Present value of the payments after 10 years is <math display = "block"> \left(1.06\right)^{-10}\int_{0}^{\infty}\left(1.03\right)^{s}\left(1.06\right)^{-s}d s={\frac{0.5584}{\ln\left(1.06\right)-\ln\left(1.03\right)}}=19.45 </math> Total present value = 27.03 {{soacopyright | 2023 }}")
Exercise
ABy Admin
Nov 18'23
Answer
Solution: A
Present value for the first 10 years is
[[math]]{\frac{1-\left(1.06\right)^{-10}}{\ln\left(1.06\right)}}=7.58
[[/math]]
Present value of the payments after 10 years is
[[math]]
\left(1.06\right)^{-10}\int_{0}^{\infty}\left(1.03\right)^{s}\left(1.06\right)^{-s}d s={\frac{0.5584}{\ln\left(1.06\right)-\ln\left(1.03\right)}}=19.45
[[/math]]
Total present value = 27.03
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.