Revision as of 14:03, 19 November 2023 by Admin (Created page with "'''Solution: B''' <math display="block"> \begin{aligned} R_1= & \frac{20000}{\frac{1-\left(\frac{1.1}{1.09}\right)^{10}}{0.09-0.1}}=\frac{20000}{9.562} \\ = & 2091.61 \end{aligned} </math> The fourth payment is <math>2091.61(1.1)=2300.71</math> The principal outstanding before the fourth payment is <math display="block"> 2300.71 \frac{1-\left(\frac{1.1}{1.09}\right)^9}{0.09-0.1}=19708.94 </math> Interest in the fourth payment is <math>=19708.94(0.09)=1773.80</mat...")
Exercise
ABy Admin
Nov 19'23
Answer
Solution: B
[[math]]
\begin{aligned}
R_1= & \frac{20000}{\frac{1-\left(\frac{1.1}{1.09}\right)^{10}}{0.09-0.1}}=\frac{20000}{9.562} \\
= & 2091.61
\end{aligned}
[[/math]]
The fourth payment is [math]2091.61(1.1)=2300.71[/math]
The principal outstanding before the fourth payment is
[[math]]
2300.71 \frac{1-\left(\frac{1.1}{1.09}\right)^9}{0.09-0.1}=19708.94
[[/math]]
Interest in the fourth payment is [math]=19708.94(0.09)=1773.80[/math] [math]X=[/math] Principal repaid [math]=2300.71-1773.80=526.91[/math]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.