Revision as of 00:16, 22 November 2023 by Admin (Created page with "Mat takes out a loan for a car for $35,000. He must make 16 annual payments of $4,000. For the first 7 years the interest rate is 8%, what is the annual effective interest rate for the last 9 years? <ul class="mw-excansopts"><li>.115</li><li>.242</li><li>.082</li><li>.087</li><li>.468</li></ul> {{cite web |url=https://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1008&context=statsp |last=Hardiek |first=Aaron |date=June 2010 |website=digitalcommons.calpoly.ed...")
ABy Admin
Nov 22'23
Exercise
Mat takes out a loan for a car for $35,000. He must make 16 annual payments of $4,000. For the first 7 years the interest rate is 8%, what is the annual effective interest rate for the last 9 years?
- .115
- .242
- .082
- .087
- .468
Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.
ABy Admin
Nov 22'23
Solution: D
pv = 35000, i = .08 for first 7 years
[[math]]
\begin{aligned} & 35000=4000\left[\mathrm{a}_{\overline{7}|0.08}+\mathrm{v}_{.08}{ }^7 \mathrm{a}_{\overline{9} \mid \mathrm{x}}\right] \\ & 8.75=\mathrm{a}_{\overline{7}|0.08}+\mathrm{v}_{.08} \mathrm{a}_{\overline{9} \mid \mathrm{x}} \\ & 6.073=\mathrm{a}_{\overline{9} \mid \mathrm{x}} \\ & \mathrm{i}=.0868\end{aligned}
[[/math]]
Hardiek, Aaron (June 2010). "Study Questions for Actuarial Exam 2/FM". digitalcommons.calpoly.edu. Retrieved November 20, 2023.