Actuarial Science 2053 Chapter Notes - Chapter 3: Interpolation, B-Method, Linear Interpolation
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Determining the term of an annuity (section 3. 5) You can use logs to solve: ins | ina | or. Problem: n will rarely be an integer, will need to calculate a final payment that is different from r in order to have equivalence. Two methods: the last regular payment is increased by an amount which will make the payments equivalent to a or s. This increase is called a balloon payment: a smaller concluding payment is made one interest period after the last regular payment. A couple wishes to accumulate ,000 by depositing at the end of each quarter in a fund earning j4 = 16%. You take out a loan of ,000 and will pay it back with monthly payments of for as long as is necessary. You cannot solve ins | ina | or. Instead, we need to use an approximation method to solve for i.