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Questions tagged [annuity]

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26 questions
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1 vote
1 answer
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I know this should appear simple but I cannot really wrap my head on how to know which measurement of interest should be used. So, I am reviewing for a FM exam and tried this problem. John makes ...
Jewel Kyle Fabula's user avatar
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0 votes
1 answer
174 views

My question has to do with drawing correct conclusions regarding deferred mortality probability from a mortality table. I am looking at the table below (source). In it, the $q_x$ (2nd columns) is ...
Simon Righley's user avatar
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0 votes
1 answer
156 views

Let's say I own a parking space. I have two options: I can rent out this parking space for $1,000/month. I am assuming that the rent will keep pace with inflation, which we'll call 2% over the long ...
Vanilla551's user avatar
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0 votes
1 answer
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Our professor calculated the present value of a bond with $T=10$ years, $FV=10,000$€, $C=700$€ p.a. and an expected rate of return $r$. He wrote $$\begin{align}PV&=C\cdot\sum_{n=1}^{10}\frac{1}{(1+...
Uhmm's user avatar
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0 votes
1 answer
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So, for the sake of simplicity, ignoring taxes, expense ratio, volatility or anything else other than known values for the following five variables: Starting contribution (dollars) Annual ...
recisuser's user avatar
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-3 votes
1 answer
48 views

I've got a question relating to annuities which I'm stuck on. You intend to retire when you are 60 and predict you will die when you are 90. You want 50,000 a year for a comfortable retirement, and ...
chris calls's user avatar
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0 votes
1 answer
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I have a question regarding an annuity loan calculation and I would like to prove whether the hypothesis I am stating is correct: Consider an annuity loan $L_{1}$, with a principal of $T_{1} = 100$ ...
Snowflake's user avatar
  • 113
0 votes
1 answer
278 views

When we price a fixed rate bond using Quantlib, we generally take below approach - ...
Bogaso's user avatar
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1 vote
0 answers
78 views

A am currently reading a manual on how to use some actuarial modelling software to project the expected liability payments made under an annuity contract. In this guide, the following statement is ...
John Smith's user avatar
  • 175
0 votes
2 answers
144 views

See the question above, the result should be 10.689. I tried using the temporary annuity-due formula (see below): $$ \ddot{\mathbf{a}}_{n}^{[m]}=\frac{1-v^{n}}{d^{[m]}} $$ where: $$ d^{[m]}=m \cdot\...
gvncore's user avatar
  • 3
3 votes
1 answer
761 views

Let's note $L(t,T_i,T_{i+1})$ the libor rate observed at $t$, fixing at $T_i$ with delivery at $T_{i+1}$. The natural delivery date for this rate is $T_{i+1}$, so a vanilla swap with no pay lag would ...
user41506's user avatar
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2 votes
1 answer
619 views

How to calculate combined IRR for two different cost of funds? The emi (Equated Monthly Installment) amount, whether it is calculated separately or based on the combined IRR should be same. I tried ...
Rag's user avatar
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3 votes
1 answer
8k views

In H. Corb's book about interest rate swaps and oder derivatives, the present value of an T into n payer swaption is given via $A\sigma\sqrt{T}\left[\frac{1}{\sqrt{2\pi}}e^{-\frac{d^2}{2}}+d\,\...
patientCoder's user avatar
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-1 votes
1 answer
93 views

The following is a previous examination question in Financial Mathematics: If $A, r, n, PV$ and $FV$ represents the ordinary annuity (annuity immediate) amount, rate of interest, number of years, ...
pabhp's user avatar
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0 votes
1 answer
211 views

To determine the present value of an annuity due, 1 is added to the discount factor of the ordinary annuity. However, to determine the future value of an annuity due, 1 is removed from the discount ...
od320's user avatar
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