Revision as of 20:46, 18 November 2023 by Admin (Created page with "An n-year annuity, with a payment of 1 at the end of each year, has a present value of 5.5554 at an annual nominal interest rate, convertible m times per year. Also: #j is the effective rate of interest per interest conversion period, and #<math>(1+j)^m = 1.0614 </math> Calculate n. <ul class="mw-excansopts"><li>7</li><li>8</li><li>9</li><li>10</li><li>There is insufficient information to calculate n</li></ul> {{soacopyright | 2023 }}")
ABy Admin
Nov 18'23
Exercise
An n-year annuity, with a payment of 1 at the end of each year, has a present value of 5.5554 at an annual nominal interest rate, convertible m times per year. Also:
- j is the effective rate of interest per interest conversion period, and
- [math](1+j)^m = 1.0614 [/math]
Calculate n.
- 7
- 8
- 9
- 10
- There is insufficient information to calculate n
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
ABy Admin
Nov 18'23
Solution: A
[[math]]\begin{aligned} & 5.5554=\frac{1-\left(\frac{1}{1.0614}\right)^n}{0.0614} \\ & n=7\end{aligned}[[/math]]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.