Revision as of 19:07, 18 November 2023 by Admin (Created page with "'''Solution: C''' The PV of the first twenty payments is: <math display = "block"> 14,000\left(\frac{1-\left(\frac{1.04}{1.10}\right)^{20}}{0.10-0.04}\right)=157,337.48 </math> The PV of the remaining payments starting at time 21 is: <math display = "block"> 14,000(1.04)^{19}(1.01)\biggl(\frac{1}{0.10-0.01}\biggr)(1.10)^{-20}=49.202.44 </math> Total equals 206,539.92. {{soacopyright | 2023 }}")
Exercise
ABy Admin
Nov 18'23
Answer
Solution: C
The PV of the first twenty payments is:
[[math]]
14,000\left(\frac{1-\left(\frac{1.04}{1.10}\right)^{20}}{0.10-0.04}\right)=157,337.48
[[/math]]
The PV of the remaining payments starting at time 21 is:
[[math]]
14,000(1.04)^{19}(1.01)\biggl(\frac{1}{0.10-0.01}\biggr)(1.10)^{-20}=49.202.44
[[/math]]
Total equals 206,539.92.
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.