All Questions
Tagged with finance actuarial-science
258
questions
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51
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Question about accumulated values and nominal rates of discount
A collection agency pays a doctor $\$5,000$ for invoices that the doctor hasn't been able to collect on. After two years, the collection agency has collected $\$6,000$ on the invoices. At what nominal ...
- 183
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2
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434
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Best books covering SOA Exam Fm
Looking for book recommendations to self learn material for SOA exam FM. (This exam is mostly equations involving compound interest). Particularly something that covers the underlying math intuitively ...
- 526
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1
answer
49
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How to calculate the accumulated value of a simple interest annuity?
An account is credited interest using 6% simple interest rate from the date of each deposit into > the account. Annual payments of 100 are deposited into the account. Calculate the accumulated
...
- 183
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1
answer
52
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Calculating the withdrawal amount from a fund as an annuity-immediate incorrectly
I have the following problem.
Consider an investment of $5,000 at 6% convertible semiannually. How much can be withdrawn each
half-year to use up the fund exactly at the end of 20 years?
I can tell ...
- 183
0
votes
1
answer
57
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Macaulay Duration?
I have a problem with a question, I don't know if the question is well worded, it reads as follows
Having the following information about a loan:
Interest rate: 11.5% per annum, compounded monthly.
...
- 57
0
votes
1
answer
74
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How to determine an annuity is due or immediate in the FM exam
There is an classic SOA problem I found confused about.
College tuition is 6000 for the current school year, payable in full at the beginning of the school year. College tuition will grow at an annual ...
- 183
0
votes
1
answer
45
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Using $a_{\overline {n} \rceil i}$ from Exam FM.
I am trying to solve the following problem
Olga buys a 5-yr increasing annuity for $X$. Olga will receive $2$ at the end of the first month, $4$ at the end of the second month, and for each month ...
- 183
3
votes
1
answer
159
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Is it possible for interest to = principal for all and each installments?
In practice, there are two main amortization methods used by and large for retail mortgages:
The classical amortization formula where all installments have the same value, however the interest % and ...
- 33
2
votes
2
answers
148
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Using $(I^{(m)}a)^{(m)}_{\bar{n}|}$ to solve for the present value of an annuity where payments increase monthly
I've seen this answer and I understand the methodology, but I am wondering why my original solution using a different method did not work.
This is the sample problem in my study guide for Exam FM:
...
- 23
0
votes
1
answer
227
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Financial Mathematics. Specific Nominal Discount Rate Question [closed]
The question is from Marcel P Finan's "A Basic Course in the Theory of Interest and Derivatives Markets: Preparation for the Actuarial Exam FM/2".
Suppose that $100$ is deposited into a ...
- 13
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votes
1
answer
119
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Perpetuities with differing payment and compounding periods in practice
I've been studying annuities and perpetuities recently and have tried to solve a simple problem using them.
I want to find the lump sum I'd need now so that I could withdraw $\$10$ each month forever. ...
- 2,035
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votes
1
answer
101
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Comparing two mortage rates.
Say I buy a house and take a loan for amount, $a$. The monthly interest rate the bank charges me is $r$ (banks generally quote yearly rates; divide those by $12$ to get $r$), compounded monthly and ...
- 6,943
1
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0
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107
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Force of transition and probabilities
Suppose that a model has four states: $0, 1, 2,$ and $3$, and the only possible transitions between these states is $0\rightarrow 1$, $0\rightarrow 2$, and $0\rightarrow 3$. For $t\geq 0$, $\mu_{x+t}^{...
- 189
1
vote
1
answer
282
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Life insurance transition matrix (actuarial)
Suppose that a life insurance coverage waives premium upon disability of the insured. You model
the coverage as a homogeneous Markov chain with three states: active, disabled, and dead.
The annual ...
- 189
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votes
2
answers
183
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Sinking Fund Method - Loan Repayment
I am currently faced with a practice problem for a financial mathematics course, and I would like to verify that I am approaching, the problem correctly (and ultimately that my solution is indeed ...
