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#1




Complex Annuities Practice
One of my weaknesses is complex payment schemes and timings so I've made one up.
Payments of 5 starting today made every other year for ten years followed by eight years of arithmetically increasing payments by 2 (7, 9, ect...) made yearly, all at 2% interest. Does my equation for present value look correct?
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Taking a well deserved break. Back at it in some capacity next year. VEE: Economics VEE: Accounting VEE: Statistics Job Last edited by Not Paul; 10312019 at 08:07 PM.. Reason: Removed the geometrically decreasing annuity to better focus attention. 
#2




Your problem is ambiguous. Is there a one or two year interval from the final payment of 5 and the payment of 7?

#3




Hmmm... you're right. Two year interval.
Timeline where one dash is one year: 55555791113151719
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Taking a well deserved break. Back at it in some capacity next year. VEE: Economics VEE: Accounting VEE: Statistics Job 
#4




The formula looks correct but it is not the way I would solve it. I would solve for the present value at time 10 using the P,Q formula. Enter it into FV lets say with a negative sign. Enter 2000 PMT, 5 N, 4.04 I/Y and go to BGN mode. Then cpt PV. I normally don't like BGN mode because it is easy to forget you are in it but I think it works best in this case.

#5




Quote:
Thanks for the engagement
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Taking a well deserved break. Back at it in some capacity next year. VEE: Economics VEE: Accounting VEE: Statistics Job 
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