Annuities Where Payments Vary
(section 4.4)
Not all annuities have a level series of
payments; instead we are going to look
at annuities where the payments change
every period
Two Standard Types
(I)
Payments vary in terms of a
constant ratio
these are an

DEPT. OF STATISTICAL AND ACTUARIAL SCIENCES
Actuarial Science 2053
2012-13
Mid Term Test 1
Friday, October 26, 2012
2-hour multiple choice
Name:_
7:00 pm 9:00 pm
Student Number:_
INSTRUCTIONS
1. This is a 2-hour closed book examination.
2. There are 22 mu

Actuarial Science 2053 Test 1 - Formula Page
Simple Interest
S = P (1 + r t )
Simple Discount
S = P (1 d t )1
Compound Interest
S = P (1+ i ) n
P = S (1 + r t )1
I = Prt = S P
P = S (1 d t )
P = S (1+ i ) n
D = Sdt = S P
i = jm / m
Equivalent Rates
jm and

DEPT. OF STATISTICAL AND ACTUARIAL SCIENCES
And
Kings University College
Actuarial Science 2053
2014-15
Test #1
Friday, October 24, 2014
2 hour multiple choice
6:00 pm 8:00 pm
INSTRUCTIONS
1. This is a closed book examination.
2. There are 22 multiple cho

Actuarial Science 2053 Test 1 Handout Section 570/571 at Kings
1.
Test 1 is scheduled for Friday, October 24, 2014 from 6 to 8 pm.
2. The exam will be written in the following rooms: SA 150/SA 151 at Kings.
Please go to your grade book in WebCT OWL, find

Chapter 6 Bonds
Introduction (section 6.1)
When a corporation or government needs a
large sum of money for a long period of
time, they can issue bonds
the bonds can be sold to a large number
of investors
A bond is a written contract between the
issuer (b

DEPT. OF STATISTICAL AND ACTUARIAL SCIENCES
Actuarial Science 2053
Mid Term Exam 1
3-hour multiple choice
INSTRUCTIONS
1. This is a closed book examination.
2. There are 33 multiple choice questions. 1 mark for each correct answer, 0 marks if blank or
inc

In-Class Quiz #1 Actuarial Science 2053 2014-15 - (13413214)
Name:
Student Number:
Write your answers in the space given. Show ALL your work.
1.
You take out an 8-month discounted loan on May 11, 2013. The loan company charges you a simple
discount rate o

Chapter 4 General and Other Annuities
General Annuities (section 4.1)
General annuities are annuities (either
ordinary or due) where the interest
period and the payment period are NOT
the same
we will look at annuities where
payments are made more/less
f

Perpetuities (section 4.3)
A perpetuity is an annuity where the
payments begin on a fixed date and
continue forever
since payments continue forever, it is
meaningless to calculate accumulated
values
we will only look at the present value
of perpetuities

Determining the Term of an Annuity
(section 3.5)
Given: S or A, R, i
Determine: n
Method
You can use logs to solve:
S = R sn|i
or
A = R an|i
Problem
n will rarely be an integer
will need to calculate a final payment
that is different from R in order to

Discounted Value of An Ordinary
Simple Annuity (section 3.3)
Consider the following
An ordinary simple annuity consisting of
n-payments of $1
we wish to determine the present value,
A, of these payments at the beginning
of the term
that is, what is the

Example 2.4.4
A loan is taken out on October 4, 2010 and is
due on May 11, 2013 at j4 = 6%. Calculate the
maturity value of the loan using both the exact
and practical methods.
Solution to 2.4.4
Determining the Rate and Time (2.5)
(I)
Determining the Rate

Chapter 2 Compound Interest
Fundamental Compound Interest
Formula (section 2.1)
Compound Interest
The interest earned in any given period
of time is added to the principal and it
thereafter earns interest
the interest is said to be compounded
Definition

Chapter 1 Simple Interest and Discount
Simple Interest (section 1.1)
In any financial transaction, there are
two parties:
The lender and the borrower
Consider the following transaction:
Person A lends money to person B
person A is called the lender or
in

Compound Interest at Changing Interest
Rates (section 2.7)
In all examples/exercises so far, the
interest rate was assumed to be constant
throughout the term of the investment
frequently, however, the interest rate
changes over the term of a loan or
inve

Chapter 3 Simple Annuities
Introduction
Suppose you deposit $500 every 6months for 2-years.
How much will you have accumulated
immediately after the 4th deposit if
j2 = 6%?
Suppose you made semi-annual deposits for
40-years? (80 payments in total) What is

Partial Payments (section 1.4)
When a person borrows money, they can
pay back the loan, with interest, in one of
two ways:
1. With a single payment on the due date
2. With a series of partial payments
during the whole term of the loan
Methods to Handle Pa

In-Class Quiz #1 Actuarial Science 2053 2013-14 - (13413214)
Name:
Student Number:
Write your answers in the space given. Show ALL your work.
1.
A promissory note for $3000 is written on March 14, 2013. It is due in 9 months. The maturity value of the not

Chapter 3 Simple Annuities
Introduction
Suppose you deposit $500 every 6-months
for 2-years.
How much will you have accumulated
immediately after the 4th deposit if j2 = 6%?
Draw a timeline
Deposit 500 every 6 months for 2 years, for 4 total
periods
I=0.0

Discounted Value of An Ordinary Simple
Annuity (section 3.3)
Consider the following
An ordinary simple annuity consisting of
n-payments of $1
we wish to determine the present value, A,
of these payments at the beginning of the
term
that is, what is the

Compound Interest at Changing Interest
Rates (section 2.7)
In all examples/exercises so far, the interest
rate was assumed to be constant throughout
the term of the investment
frequently, however, the interest rate
changes over the term of a loan or
inve

Chapter 1 Simple Interest and Discount
Simple Interest (section 1.1)
In any financial transaction, there are two
parties:
The lender and the borrower
Consider the following transaction:
Person A lends money to person B
person A is called the lender or
in

Compound Interest at Changing Interest
Rates (section 2.7)
In all examples/exercises so far, the interest
rate was assumed to be constant throughout
the term of the investment
frequently, however, the interest rate
changes over the term of a loan or
inve