Revision as of 20:23, 18 November 2023 by Admin (Created page with "'''Solution: B''' The PV of the annuity following the <math>11^{\text {th }}</math> payment is: <math>10 a_{\left.9\right|_{0.06}}=68.0169</math>. The effective semi-annual rate is <math>j=\frac{i^{(2)}}{2}=1.06^{1 / 2}-1=0.02956301</math>. Next, <math display="block"> \begin{aligned} & P V=K\left[\frac{1}{0.02956301-0.005}\right]=68.0169 \\ & K=1.67 \end{aligned} </math> {{soacopyright | 2023 }}")
Exercise
ABy Admin
Nov 18'23
Answer
Solution: B
The PV of the annuity following the [math]11^{\text {th }}[/math] payment is: [math]10 a_{\left.9\right|_{0.06}}=68.0169[/math].
The effective semi-annual rate is [math]j=\frac{i^{(2)}}{2}=1.06^{1 / 2}-1=0.02956301[/math]. Next,
[[math]]
\begin{aligned}
& P V=K\left[\frac{1}{0.02956301-0.005}\right]=68.0169 \\
& K=1.67
\end{aligned}
[[/math]]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.