Revision as of 23:59, 21 November 2023 by Admin (Created page with "Eric deposits $6,000 into an account that gives 6% interest annually. He takes out $2,000 at the end of years 7, 14, and 21 at a penalty of 4%. What is the accumulated value of the deposit at the end of year 23? <ul class="mw-excansopts"><li>$16,678.50</li><li>$5,507.16</li><li>$11,783.36</li><li>$8,695.22</li><li>$35,053.63</li></ul> {{cite web |url=https://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1008&context=statsp |last=Hardiek |first=Aaron |date=Jun...")
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ABy Admin
Nov 21'23

Exercise

Eric deposits $6,000 into an account that gives 6% interest annually. He takes out $2,000 at the end of years 7, 14, and 21 at a penalty of 4%. What is the accumulated value of the deposit at the end of year 23?

  • $16,678.50
  • $5,507.16
  • $11,783.36
  • $8,695.22
  • $35,053.63

Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.

ABy Admin
Nov 22'23

Solution: C

Initial deposit: 6,000

Withdrawals: 2,000 at the end of 7, 14, 21

Interest rate = .06

penalty = .04

Accumulated value = 6,000(1.06)23 – 2,000(1.04)(1.06)16 - 2,000(1.04)(1.06)9 - 2,000(1.04)(1.06)2 =$11,783.36


Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.

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