Krzys’ Ostaszewski http://www.math.ilstu.edu/krzysio/ Exercise 11
Author of the Course FM manual available at:
http://smartURL.it/krzysioFM (paper) or http://smartURL.it/krzysioFMe (electronic)
Instructor for online seminar for exam FM: http://smartURL.it/onlineactuary
You are given that a!!n = 5 and !!
sn = 8. Find d.
A. 5.5%
B. 6.0%
C. 6.5%
D. 7.0%
E. 7.5%
Solution.
We have
n
n
8 = !!
sn = (1 + i ) ! a!!n = (1 + i ) ! 5,
so that
8
.
5
Substituting this into !!
sn = 8, we get
(1 + i )n =
!!
sn
n
1 + i) ! 1
(
=
=
d
8
! 1 0.6
5
=
= 8,
d
d
or
d=
0.6
3
=
= 0.075 = 7.5%.
8
40
Answer E.
© Copyright 2005 by Krzysztof Ostaszewski.
All rights reserved. Reproduction in whole or in part without express written
permission from the author is strictly prohibited.