Payments of 1000 at the end of each year are paid on a loan of 12,000. The payments are based on an annual effective interest rate of 10%.

Calculate the outstanding loan balance immediately after the 12 th payment

• 3270
• 3572
• 3758
• 3796
• 3834

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

Solution: D

Using the retrospective method,

[[math]] 12,000(1.10)^{12}-1000s_{\overline{{{12}}}|0.10} = 37, 661.14 -1000(21.38428) =16, 276.86. [[/math]]

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