Revision as of 12:17, 19 November 2023 by Admin (Created page with "A 25-year loan is being repaid with payments of 1300 at the end of each year. The loan payments are based on an annual effective interest rate of 8%. The borrower pays an additional 4000 at the time of the fifth payment and will repay the remaining balance with a payment of X at the end of each of the subsequent ten years. Calculate X <ul class="mw-excansopts"><li>893</li><li>1300</li><li>1306</li><li>1500</li><li>1902</li></ul> {{soacopyright | 2023 }}")
ABy Admin
Nov 19'23
Exercise
A 25-year loan is being repaid with payments of 1300 at the end of each year. The loan payments are based on an annual effective interest rate of 8%. The borrower pays an additional 4000 at the time of the fifth payment and will repay the remaining balance with a payment of X at the end of each of the subsequent ten years.
Calculate X
- 893
- 1300
- 1306
- 1500
- 1902
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
ABy Admin
Nov 19'23
Solution: C
[[math]]
\begin{array}{l}{{1300a_{\overline{{{20}}}|0.08}-4000=X a_{\overline{{{10}}}|0.08}}}\\ {{12,763.59-400=X(6.71008)=1306.03}}\end{array}
[[/math]]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.