Actuarial Outpost Calculating unknown interest rate
 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

Search Actuarial Jobs by State @ DWSimpson.com:
AL AK AR AZ CA CO CT DE FL GA HI ID IL IN IA KS KY LA
ME MD MA MI MN MS MO MT NE NH NJ NM NY NV NC ND
OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY

#1
03-07-2005, 02:38 PM
 Epsilon Theta Member SOA Join Date: Oct 2001 Posts: 263
Calculating unknown interest rate

Are students supposed to use linear interpolation to calculate an unknown interest rate when the problem is not simple enough to use the financial calculator? I use the Excel Solver function in "real life". Linear interpolation can be time consuming.
#2
03-07-2005, 02:53 PM
 NewTubaBoy Member CAS Join Date: Jul 2004 Location: Boston Studying for CAS 8 Favorite beer: Blue Moon Posts: 1,391

Can you give an example of an old exam question like that?
#3
03-07-2005, 02:58 PM
 wat? Member SOA Join Date: May 2004 Location: Hi Studying for Foundations of CFE Posts: 32,475

Quote:
 Originally Posted by Epsilon Theta Are students supposed to use linear interpolation to calculate an unknown interest rate when the problem is not simple enough to use the financial calculator? I use the Excel Solver function in "real life". Linear interpolation can be time consuming.
I suppose, if you really felt like it, and if a problem like that happened to appear on the exam, you could try to memorize the Newton-Rahpson formulas. I doubt they'll appear, though. In the past, the problems were designed so that the most complicated formula you'd need to remember to figure out i is the quadratic formula. Then again, it is the first FM, so...
__________________
"Mathematical Induction: How mathematicians manage to suck all the fun out of lining up a row of dominos, knocking the one on the end down, and watching the entire row fall." -BC
Skip it. - AG

Because everything should taste like bacon.
AO Golfers Unite! Here and here.
#4
03-07-2005, 05:55 PM
 Epsilon Theta Member SOA Join Date: Oct 2001 Posts: 263

Quote:
 Originally Posted by NewTubaBoy Can you give an example of an old exam question like that?
Can't think of one. But after doing problems from Broverman, I thought about it. I'm hoping the SOA won't be so cruel.
#5
03-09-2005, 02:23 PM
 NewTubaBoy Member CAS Join Date: Jul 2004 Location: Boston Studying for CAS 8 Favorite beer: Blue Moon Posts: 1,391

I'm pretty sure you won't have to do anything like that.
#6
03-09-2005, 05:35 PM
 Skowron SOA AAA Join Date: Oct 2003 Location: INLAND EMPIRE Studying for MLC Favorite beer: Sierra Nevada Celebration Ale Posts: 28

From your mouth to god's ears, NewTubaBoy
#7
03-14-2005, 04:40 PM
 nicole Member Join Date: May 2004 Posts: 62
try this

maybe you could try to substitute all 5 choices into the your final function to see which number yields the answer. sometimes this is a better way compared to calculate i directly.

Last edited by nicole; 03-14-2005 at 04:55 PM..

 Thread Tools Display Modes Linear Mode

 Posting Rules You may not post new threads You may not post replies You may not post attachments You may not edit your posts BB code is On Smilies are On [IMG] code is On HTML code is Off

All times are GMT -4. The time now is 10:29 AM.

 -- Default Style - Fluid Width ---- Default Style - Fixed Width ---- Old Default Style ---- Easy on the eyes ---- Smooth Darkness ---- Chestnut ---- Apple-ish Style ---- If Apples were blue ---- If Apples were green ---- If Apples were purple ---- Halloween 2007 ---- B&W ---- Halloween ---- AO Christmas Theme ---- Turkey Day Theme ---- AO 2007 beta ---- 4th Of July Contact Us - Actuarial Outpost - Archive - Privacy Statement - Top