Practice Quiz

Enrolled Actuary Exam Prep

Category - Enrolled Actuary

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Terms of two actuarially equivalent annuities: Annuity A: $500 at the end of each of the first 3 months, and $1,000 at the end of each of the next 9 months Annuity B: X at the end of each of the first 2 quarters, and 2X at the end of the next 2 quarters Interest rate: 8% per year, compounded monthly In what range is X?
  1. Less than $1,770
  2. $1,770 but less than $1,800
  3. $1,800 but less than $1,830
  4. $1,830 but less than $1,860
  5. $1,860 or more
Explanation
Answer: A - Less than $1,770
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