FM for Actuaries

Contents
About the Authors
Preface to the Second Edition
Lists of Mathematical Symbols
vii
ix
xv
Chapter 1 Interest Accumulation and Time Value of Money 1
1.1 Accumulation Function and Amount Function . .......... 2
1.2 Simple and Compound Interest . . . ................ 2
1.3 Frequency of Compounding .................... 5
1.4 EffectiveRateofInterest ...................... 9
1.5 Rates of Discount .......................... 12
1.6 ForceofInterest........................... 16
1.7 Present and Future Values . ..................... 19
1.8 EquationofValue.......................... 24
1.9 Summary .............................. 27
Exercises .............................. 28
Chapter 2 Annuities 39
2.1 Annuity-Immediate......................... 40
2.2 Annuity-Due ............................ 43
2.3 Perpetuity, Deferred Annuity and Annuity Values at Other Times . 45
2.4 Annuities under Other Accumulation Methods . .......... 49
2.5 Payment Periods, Compounding Periods and Continuous Annuities 51
2.6 Varying Annuities .......................... 56
2.7 TermofAnnuity .......................... 60
2.8 Summary .............................. 64
Exercises .............................. 64