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#1
08-05-2012, 02:29 PM
 lteece89 SOA Join Date: Jan 2012 Posts: 8
Typo in solution for Annuities question?

You set up a retirement fund by making annual payments at the end of each year for 30 years. The first payment is 1000 and each subsequent payment is increased by 100 over the previous one. The fund earns 5.8% annually. How much has accumulated in the fund at the end of 30 years?

I viewed the solution as an AV plus an increasing annuity.

I have that AV= 1000s(30) + 100(Is)(30).

The solution in the book uses the same s(30) value in both of these equations, but I don't see how that could be correct.

My work has (((1+i)^n) -1) / i for the first s(30) and (((1+i)^n) -1) / d for the s(30) used in the (Is)(30) formula.
#2
08-05-2012, 03:59 PM
 Kaner3339 Member SOA Join Date: Jun 2011 Location: Canada Studying for MLC & MFE Posts: 907

Your first payment equals 1100. Change second term to 100v(Is)(29)
#3
08-05-2012, 07:19 PM
 Bananas88 Member CAS SOA Join Date: May 2012 Location: NYC Studying for C/4 Posts: 137

So the correct answer would be AV= 900s(30) + 100(Is)(30), right?
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#4
08-05-2012, 10:14 PM
 Kaner3339 Member SOA Join Date: Jun 2011 Location: Canada Studying for MLC & MFE Posts: 907

sure that's another one

 Tags accumulated value, annuities

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