Revision as of 18:50, 19 November 2023 by Admin (Created page with "'''Solution: A''' The book value after the third coupon is <math display = "block"> 7500(0.037)a_{\overline{{{37}}}|0.0265}+C(1.0265)^{-37}=6493.05+0.379943C </math> and after the fourth coupon it is <math display = "block"> 7500(0.037)a_{\overline{300}|0.0265}+C(1.0265)^{-36}=6387.61+0.390012C. </math> Then <math display = "block"> \begin{array}{l}\\ {{6493.05+0.379943C-(6387.61+0.390012C)=28.31}}\\ {{105.44-0.01069C=28.31}}\\ {{C = 7660.15.}} \end{array} </math>...")
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Exercise

ABy Admin
Nov 19'23

Answer

Solution: A

The book value after the third coupon is

[[math]] 7500(0.037)a_{\overline{{{37}}}|0.0265}+C(1.0265)^{-37}=6493.05+0.379943C [[/math]]

and after the fourth coupon it is

[[math]] 7500(0.037)a_{\overline{300}|0.0265}+C(1.0265)^{-36}=6387.61+0.390012C. [[/math]]

Then

[[math]] \begin{array}{l}\\ {{6493.05+0.379943C-(6387.61+0.390012C)=28.31}}\\ {{105.44-0.01069C=28.31}}\\ {{C = 7660.15.}} \end{array} [[/math]]

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

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