At an annual effective interest rate of 5%, a 10-year annuity-immediate starting with an annual payment of 100 increases each year by 15% of the previous year's payment and has a present value of X.

Calculate X.

• 597
• 772
• 1040
• 1247
• 1484

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

Solution: E

[[math]]P V=100\left[\frac{1-\left(\frac{1.15}{1.05}\right)^{10}}{0.05-0.15}\right]=1483.62[[/math]]

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