Exercise


ABy Admin
Nov 22'23

Answer

Solution: E

Monthly rate of interest: [math]j=(1+.08)^{1 / 12}=.00643[/math]

[[math]] \begin{aligned} & 140,000=x a_{\overline{480}| .00667 }\\ & x=927.513 \end{aligned} [[/math]]

outstanding balance after 20 years

[[math]] 927.513=\mathrm{a}_{\overline{480} | .00667}=114,611.417 [[/math]]

doubling the payments:

[[math]] 927.513(2)=1855.03 [[/math]]

new amount of years:

[[math]] \begin{aligned} & 114,611.417=1855.03 \mathrm{a}_{\overline{n}| .00667} \\ & \mathrm{n}=76.916=77 \end{aligned} [[/math]]

total paid

[[math]] 927.513(240)+1855.03(77)=365,440.43 [[/math]]

interest

[[math]] 365,440.43-140,000=225,440.43 [[/math]]


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

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