I'm trying to work on an interest problem in the ASM manual and am confused by the solution. The question is asked in terms of discount rates but the solution uses interest rate.
I try to solve for the d by setting the value of two accounts equal.
(50*(1-d)^-16)*d = (100*(1-d)^-10)*d
I am able to solve for d= 10.91% then convert to i=12.25%
To get the amount earned, using i, in the 11th year of the account with 100 I calculate
(100*(1+.1225)^10)*(0.1225) = 38.9
But to calculate using the discount rate I'm not able to get a correct answer
I've tried
(100*(1-.1091)^-10)*(.1091)^-1
Could someone please help me to solve for the amount earned using the discount rate?
Bonus: If someone could guide me to a resource so that I could learn how to format with LaTex I would be one happy actuarial student.
I try to solve for the d by setting the value of two accounts equal.
(50*(1-d)^-16)*d = (100*(1-d)^-10)*d
I am able to solve for d= 10.91% then convert to i=12.25%
To get the amount earned, using i, in the 11th year of the account with 100 I calculate
(100*(1+.1225)^10)*(0.1225) = 38.9
But to calculate using the discount rate I'm not able to get a correct answer
I've tried
(100*(1-.1091)^-10)*(.1091)^-1
Could someone please help me to solve for the amount earned using the discount rate?
Bonus: If someone could guide me to a resource so that I could learn how to format with LaTex I would be one happy actuarial student.
Switching between discount and interest rate
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