This preview shows pages 1–15. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: 1.. Course EM Which of the fnlinwing exprassions [IDES HUT raprescnt a deﬁnition [or a: '? {A} v"[{]+?ﬂ"] 0" m z May 2005 4. An esrate pmvities a perpetuity with payments nt‘X at the end of each year. Seth, Susan,
and Lori share the perpetuityr such the}. Seth receives the payments efX fer the ﬁrst :1
years and Susan receives the payments efX Ferthe nextm years'eﬂer vvhieh Lori receives all the remaining payments efX. which of the Fallenring represents the difference between the present value et‘Seth’s and Susan's payments using a eenstentrete of interest? . yam
{B} «fie—vvs] i (C) _ X[es—v'*'n;;]' grubmm Q)“ Lu) X [en —v""'a—] (E) X[vﬂg_vn+lam] h _ _ $4. Course Fﬁf 9'12 . _ To anmnnuln‘ta BEIGE} at [he End of 3:: years, depusils of 93 are made at the end of each of , ' the. ﬁrstn years and 196 at the and of ehch of'the heart 13: yeah. The annual eE'ective rate 01‘ intert is 1' . You an: givm (I +17)" = 2.!) .  11: m m _
4a. “IE ” W” .  , _ Emmi "n V“ n
{A} I].15% _   ‘15}. @ (gg . , , . 1a  # v 9” (B) 11.15% 33pm. , _ . v * Quﬂ
{C} 1225% '
[D] 113% p (E) 13.25% Game 2. Novemher REM} 0 May BEIGE Kalhryu depoai’la lﬂﬂ iqu an account at the beginning ofaach 4year period for 41} Foam. The amount credit.5 httereat at an annual eﬁ‘ccﬁv: intereat rate of t. The accumulated amount in the account at the end of 4!] years: iaX, which is 5 times the accumulated amount in the account at the end of It} yeara. Calculath
(A) 4595
{a} sum
(C) 5445
(D) 532a @ 5195 H any. on .
l _ S a
' av. @ 27'. A. man turns 41} tndalylr and wishes to preside supplemental retirement incense of suns at
., the beginning of each mnnlh starting an his 651]” birthday. Starting today. he makes
mumth ennuibutinns DIX to a fund Her 25 years. The fund earns a nominal rate nfﬁ% enmpnunded mnmhly. Each lﬂﬂﬂ will psimade for 9.155 efineame at1l1e beginning efeeeh month surﬁng en his 55* birthday until the eml efhis life. elm ‘5 Mei/mm Calculate X. 324'ﬂ'11_!uL .W illwi' riv' HE—
. (B) 325.39 ' ' " “#— (C) 325.12 [12) 355.45 — "
{El 4511.55 Course 2, Nowember 29W ' o E 7 Ma}: 2mm :5 12. Which of the Following are characteristic: cfall pcrpctuilics? The prcscni value is equal to the ﬁrst paymcnl divided by M
the annual cﬁ’cctive intercsi,ra1c. 0k .
Payments ccntinuc Harman—kw % 0% ngﬁ . [Ell Each payinan is equal to 111:: inlcrEEt cnmcd on the principal. \r" ' \ Mailm
ﬁlm;
,ﬁnHaaTJJJ <2 ' iii. {A} l only @ ii only lil' only
{D} 11 n, and m [E] The correct mswcr is not given by (A), (B), [C], or [B]. 1:12. Camm: FM ..\ Ma)! 2000 CD A perpetuity peying l at 1he heghming of each ﬁ—memh period hes a. present value of 20 . I A SBGD‘ﬂd perpetuity pays X 211 The beginning every 2 years. Assuming the same man] eﬁeeﬂve imeTem raie, the twin present values. are equal Belemline X.
{A} 3.5
{B} I 3‘5
® 3.7
{D} 3.5
(E) 33 LT Course 2 AW (9 y: A papcnﬂtyimmadiate 9:13:51 per Brian macIVE the ﬁrst :1 paymems, Cullezq
mceives lhr: next :1 payments, and Jeﬁ'recvas the. mnaining puma. Bn'nn'a'share uf‘the pram: value. ufthe original perpetuity ii 40%, and Jeff‘s share is K . cm cammx. Em
X4 “X X’DHCL + 1):“ I
{A} 24% .ﬂ— am+ X {B} 33%
(C) 32% )ng'q : $.de
35% l LP “a
_ H “53 40% LL . Jr; z") 2): 4 (Mg; M HQUUQ EM 9 L. 17. Calmﬂatel. G) A: an mutual eﬂ’eerive interest rate ef E. E 3» 0%, the present value of a perpenﬁty paying 11'] at the end ut‘eeeh 3~yeer period, with Lhe ﬁrst payment atthe enel ufymr 6.15 32 . A: the same annual eﬁ'eeeiVe rete er', the prment value ufe ﬁerpetuitynimmediatepeylhg J at the end elf eeeh 4—month period is X . CF59: <§L> chl = ch 1:44: l
6333 chl 3 [U 1:451: 1,6100
(13) 3.9.3 ‘ mm = 12:,»
{ct} 40.3
(D) 41.3
(E) _42.e Crmnw: _" 33. Chuck needs tn purchase an inn in ID years. The Item ena‘m Eﬂﬂ today, but its price To ﬁnance the purchase, Chunk depnsiu 2} into an nee31m: at the heginnﬁ'lg of each year
fur IS years. He depnsim an addiﬁnnan at 1the beginning n‘f' years 4, 5, and 5 to meelhis gun]. The annual eﬂ'eeﬁve interest rate in 10% . :%.Q] 1 352 __ 3.3 . me W3 Mike bays :1 perpetuityinnnediate with varying, annual paymenls. Dnring the ﬁrst 5
. years, the payment is constant and equal to It] . Beginning in year 15, the payments start
to increase Fer year E and all future years, the current year’s payment is K‘H. larger than the previousyear‘s payment; _ At an annual eﬁeedve interest rate (£9193, the perpetuity has'a present value of [£5151] . CalenlsteK,giwnK<9.2. ‘
' 0MP
0 CL
(A) 4n l a
(a) 4.2 + E leCHkl+ {(341%)}
[. {C} 4.4 “ml Q‘L‘ti)‘ ' . a  at 1+6 = W (E) 4.3 . ( t+ k fluff, ql ?/ .3 a H _ F a no ~— am : {6.75 Chas1f. gig n i _ P'v PM'I‘ ——Fv‘—_' ” Cam'se 2. November .2019! p g 42. "’ You are given an annuitynimmeoiate with 11 annual payments of 1GB and a ﬁnal
payment atthe end ol12 years. At an annual effective interest rate of 3.5%, the present value at time D of all payments is 1000.
Calculate the ﬁnal payment.
(A) 145 to} 15s {D} 151 {E} 155 * Reprinted with permission from ACTEX Publications. 11:03:04 I x :17, in 4?. .Tim hegan saving money for his reiiremenl by making monthly deposits of 299 into
a Fund earning 15%in1eresi compounded monthly. The ﬁrsl deposit oeom'red on January 1, 1935. Jim became unemployed and missed making deposits I59 through 72 . He then eoniinued making mornhl],r deposits of 299 . How much did Jim aeeoinulaie in his fund on December 31, 1999 ? {A}
93} (C)
{D}
{E}
r
Lo.
Co arse 2 4.9 May 2999 I ' 3]. You are given too following table of interoat rates: @ Calonda: Year oE'Driginal Rates
Invosnnont lnvoﬁhnont‘foar Halos in% 111% “Elm '
8.25 M I
8?5 “HENRI
Inﬁll} .
mi!
m
Q? a. film]
[Mill H m
“ELIE
 ~ 
 r. A person doﬁosiLa [ﬁllll on JanuaryI l, 1991'. Lol tho following be ﬂio accumulated value
L  of the Mil[l on January:r 'l, 2000:
P: under the imminent yea: mailloo Q: under lho portfolio yield moﬂiod
R: when: [ho balance is vdlhdrawn at tho and of may
your and i5 reinvested al tho DEW money rate Dotormino the ranking DEF, Q, and R. (A) PPQH P: EWWC['G1§3Clﬂ3% CyoﬁQZLEHTO {B} PolioQ I Q 1 (m CIGEEDCt~aa¢3([.aggg: “120
(C) 9mg {i= t m (WEEm3 Quoam 5"
mm  .2
[m RoﬂbP
r.
“:30 May MES 33 Course 2 r. .. "=' .1. E
1‘th I._ _ . . The following table shows. the annual eﬁ'eeﬁve introeat rates being eredited by an
' VBSHﬂﬁnt ace:an ‘oy calendar year of investment. 'The inveeenent yea: method is app able for theﬁrst 3 years, aﬁel whioh a portfolio rate is used: An inveeonent of 1GB is made at the beginning of years 1990, 1991, and [992 . The Data] amount of intereat aedited by the ﬁmd during the year 1993 is eqn'aJ to 23.411} . Calculater. A E U “G; ' I
Jﬂr—‘Z “"11 M
(A) m iaﬁ'o Loo GOOOOH) mi,
(.13) v.25
my 1cm CHTDQGSB 5* ~o
(e; ?.5o
(:5) .. "3:75 Raﬁ?“ I [573 (ma) x Genet)
5 m . . H
I ' 2. : 195‘ka ...
View Full
Document
 Winter '09
 kong

Click to edit the document details