Revision as of 14:22, 19 November 2023 by Admin (Created page with "'''Solution: E''' Value at time 5 years: <math display = "block"> \begin{aligned} & 100,000(1.02)^{20}-2500 s_{\overline{200}|0.02} \\ & 87,851.32=5000 a_{\overline{m}|0.02} \end{aligned} </math> <math>m=21.86</math>, using the BA II Plus. Since we want a balloon payment, use <math>m=21</math>. <math display = "block"> 87,851.32=5000 a_{210.02}+B v^{21} </math> <math>\mathrm{B}=4236.70</math>, so balloon equals <math>5000+4236.70=9236.70</math> {{soacopyright | 2023 }}")
Exercise
ABy Admin
Nov 19'23
Answer
Solution: E
Value at time 5 years:
[[math]]
\begin{aligned}
& 100,000(1.02)^{20}-2500 s_{\overline{200}|0.02} \\
& 87,851.32=5000 a_{\overline{m}|0.02}
\end{aligned}
[[/math]]
[math]m=21.86[/math], using the BA II Plus. Since we want a balloon payment, use [math]m=21[/math].
[[math]]
87,851.32=5000 a_{210.02}+B v^{21}
[[/math]]
[math]\mathrm{B}=4236.70[/math], so balloon equals [math]5000+4236.70=9236.70[/math]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.