Exercise
Nov 19'23
Answer
Solution: B
The book value at time 6 is the present value of future payments
[[math]]
BV_{6}=10000v^4 + 800 a_{\overline{4}|0.06}=7920.94+2772.08=10,693.
[[/math]]
The interest portion is 10,693(0.06) = 641.58.
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.