q4 – sample sep/dec 16 – pault

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February 26, 2017 at 5:23 pm #374393
mansoor
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in the technical article, this question is presented as having to calculate the fixed amount that will be needed.

here, we are given the rate and have to find the annual payments.

my question: in trying to work backwards, i calculated PV of payments and PV of receipts but they were not equal.

can u pls explain?

regards
February 27, 2017 at 7:35 am #374464
John Moffat
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Yes – they are equal 🙂

You need to discount at the spot yield curve rates as given in the question.
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