Revision as of 23:59, 18 November 2023 by Admin (Created page with "'''Solution: B''' Just prior to the extra payment at time 5, the outstanding balance is <math display = "block"> 1300 a_{\overline{20}|0.07}=1300(10.5940) =13, 772.20. </math> After the extra payment it is 11,172.20. Paying this off in 15 years requires annual payments of <math display = "block"> 11,172.20/a_{\overline{15}|0.07}=11,172.20 / 9.1079 = 1226.65. </math> {{soacopyright | 2023 }}")
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Exercise

ABy Admin
Nov 18'23

Answer

Solution: B

Just prior to the extra payment at time 5, the outstanding balance is

[[math]] 1300 a_{\overline{20}|0.07}=1300(10.5940) =13, 772.20. [[/math]]

After the extra payment it is 11,172.20. Paying this off in 15 years requires annual payments of

[[math]] 11,172.20/a_{\overline{15}|0.07}=11,172.20 / 9.1079 = 1226.65. [[/math]]

Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.

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