Exercise


ABy Admin
Nov 18'23

Answer

Solution: E

The monthly payment on the original loan is

[[math]]\frac{65000}{a_{\overline{180}|8/12 \%}}=621.17.[[/math]]

After 12 payments the outstanding balance is

[[math]]621.17a_{\overline{168}|8/12 \%}=62,661.40[[/math]]

. The revised payment is

[[math]]\frac{62,661.40}{a_{\overline{168}|6/12\%}}=552.19. [[/math]]

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

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