Actuarial Outpost Sample problem
 Register Blogs Wiki FAQ Calendar Search Today's Posts Mark Forums Read
 FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

 DW Simpson International Actuarial Jobs Canada  Asia  Australia  Bermuda  Latin America  Europe

 Financial Mathematics Old FM Forum

#11
10-15-2018, 01:47 PM
 ShundayBloodyShunday Member CAS Join Date: Apr 2013 Posts: 2,908

Quote:
 Originally Posted by Basso This is best asked in the FM section if you want an explanation of how to do it. Is that what you are asking, or do you have a different question? Move the 50k one period just to get it out of the way (53,500) Add together all of these: Then get the PV of a 5 year annuity at payment X, at a rate of 7%. Then you have the PV of a 10 year annuity at payment 2X with a rate of 4%, discounted 5 years at 7% Then you have a 5 year annuity at payment 4X with a rate of 4% discounted 5 years at 4% and 5 years at 7%. and set them equal to the 53,500. Do algebra and X = 2562 ish.
FYP; at least, that is how I read the problem regarding payment sizes.
#12
10-15-2018, 01:48 PM
 ShundayBloodyShunday Member CAS Join Date: Apr 2013 Posts: 2,908

Quote:
 Originally Posted by Sullinator Idk I知 too dumb for this.
If this is really true, are you in the right profession?
#13
10-15-2018, 01:49 PM
 IANAE Member CAS AAA Join Date: Oct 2017 Posts: 217

Quote:
 Originally Posted by Basso Do algebra and X = 2562 ish.
#14
10-15-2018, 01:50 PM
 Sullinator Member SOA Join Date: Aug 2018 College: West Chester Universiy Posts: 129

Quote:
 Originally Posted by ShundayBloodyShunday If this is really true, are you in the right profession?
I知 not in the profession I知 only a student.
#15
10-15-2018, 01:51 PM
 Basso Member CAS AAA Join Date: Oct 2002 Location: The po'. Better cycling roads there Posts: 3,723

Quote:
 Originally Posted by ShundayBloodyShunday FYP; at least, that is how I read the problem regarding payment sizes.
no, its 2.The first annuity gets you the first 5 payments of x.

The second annuity of 2x covers 10 years. That leaves 2x more over the last 5 years. The 2x from annuity 2 in the last five years plus the 2x from the final annuity gets you the 4x.

If I'd done the middle annuity as a 5 year annuity of 2x, then the final would be 4x., but I did it as 10. You get the same answer.
#16
10-15-2018, 01:57 PM
 theBrownsAreComing Member CAS Join Date: Jun 2018 Posts: 93

Quote:
 Originally Posted by Sullinator I知 not in the profession I知 only a student.
People are only jokin cause you haven't moved this to the FM forum yet. You can figure it out it's waaay easier than passing exams.
__________________
GPODAWUND

P FM JOB IFM
ECON OC1
#17
10-15-2018, 02:02 PM
 Dr T Non-Fan Member SOA AAA Join Date: Sep 2001 Location: Just outside of Nowhere Posts: 95,383

Moved.

Also, this is at the top of the General Actuarial Forum. Please read it, then read it again.

Quote:
 General Actuarial Non-Specific Actuarial Topics - Before posting a thread, please browse over our other sections to see if there is a better fit, such as Careers - Employment, Actuarial Science Universities Forum or any of our other 100+ forums.
__________________
"Facebook is a toilet." -- LWTwJO
#18
10-15-2018, 03:07 PM
 Dr T Non-Fan Member SOA AAA Join Date: Sep 2001 Location: Just outside of Nowhere Posts: 95,383

Step 1: Make a time line.
__________________
"Facebook is a toilet." -- LWTwJO
#19
10-15-2018, 04:24 PM
 Gandalf Site Supporter Site Supporter SOA Join Date: Nov 2001 Location: Middle Earth Posts: 31,118

Quote:
 Originally Posted by Sullinator Idk I知 too dumb for this.
Quote:
 Originally Posted by Sullinator Someone told me that on the FM exam the questions on there are going to be like the questions in the ASM manual and theinfiniteactuary.com with the wording a bit different and the numbers are different, is this true? As long as you know and understand the questions from there you are prepared?
Quote:
 Originally Posted by Sullinator If I recognize a problem I should be able to solve it since I致e done it before.
The current problem is an extremely common FM problem: They give you a payment pattern, including timing of payments. They give you the pattern of interest rates. They give you the PV of the payments (here, the loan amount). They ask you to solve for the payment amount. Here, the nonequal payments are a slight complication. The deferral until the first payment is a slight complication. The nonlevel interest rates are a slight complication. You値l see all of those in ASM, Adapt and TIA. Maybe youｴll see them all in a single problem in those sources, maybe not. If you understand the material in ASM, Adapt and TIA, this should not be too difficult*. If you only remember specific questions you did before, you could find yourself stuck.

* Not that everyone who learns ADAPT, ASM and TIA reasonably well would get this question right. The main challenge, and itｴs far from simple to overcome, for people who have studied from those sources, is to apply what they saw in those sources, not things that werenｴt covered in problems in those sources.
#20
10-15-2018, 04:37 PM
 ShundayBloodyShunday Member CAS Join Date: Apr 2013 Posts: 2,908

Quote:
 Originally Posted by Basso no, its 2.The first annuity gets you the first 5 payments of x. The second annuity of 2x covers 10 years. That leaves 2x more over the last 5 years. The 2x from annuity 2 in the last five years plus the 2x from the final annuity gets you the 4x. If I'd done the middle annuity as a 5 year annuity of 2x, then the final would be 4x., but I did it as 10. You get the same answer.
I somehow overlooked the bolded in your initial presentation; and agree with what you originally wrote.

But agree that there could be different (and correct) ways of looking at the problem and getting the correct answer.