Actuarial Outpost PV and FV conversion
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 Financial Mathematics Old FM Forum

#1
08-07-2017, 02:08 PM
 Futon Member SOA Join Date: Jul 2016 Studying for FM Posts: 128
PV and FV conversion

$
150000-5483.36a_{\overline{12|}2%}-v^{12}_{2%}5134.62a_{\overline{8|}1.5%}
= 61703.98465
$

Why am I getting different answers? Are these two setups not equivalent?

EDIT: Changed minus to plus

Last edited by Futon; 08-07-2017 at 02:41 PM..
#2
08-07-2017, 03:39 PM
 ichbinnreine Member CAS Join Date: Apr 2014 Studying for ever. Favorite beer: Long Trail Ale Posts: 1,705

61703.98 * (1.02)^12 * (1.015)^8 = 88154.33
#3
08-07-2017, 03:40 PM
 ichbinnreine Member CAS Join Date: Apr 2014 Studying for ever. Favorite beer: Long Trail Ale Posts: 1,705

Idk what the setup of the problem was, so that's the best I've got. Looks like you calculated PV but they calculated FV
#4
08-07-2017, 03:44 PM
 Futon Member SOA Join Date: Jul 2016 Studying for FM Posts: 128

Thank you
Edit: Yep for the entire problem they used FV and I used PV. I thought this step was the reason why I got the wrong answer but it wasn't. It was another algebraic carelessness. Thanks for clearing it up.
#5
08-07-2017, 04:06 PM
 ichbinnreine Member CAS Join Date: Apr 2014 Studying for ever. Favorite beer: Long Trail Ale Posts: 1,705