Beware the content!

[John Lee]

The CT1 course is quite algebraically heavy (especially in Chapter 3), but students should note that the exams themselves are mostly just application based.

So in the first few chapters you would be advised to concentrate on undestanding and applying the formulae rather than trying to prove them. Hopefully this advice should save you some time.

How can you tell what is needed?

Well if you read the syllabus objectives (that 1st page of the chapter that you ignore and turn-over ) it will tell you what is needed. Often the objectives say calculate - which tells you that you should just be using the formula rather than trying to derive it.


How can I thank you for this fantastic time saving advice

Well, I accept cheques and VISA!

Do feel free to chat to me if things are still unclear!

 

[Jacqtsang]

Clarify the answer from Q&A Bank Part 1

Hi,
there is a question asking whether "S due (n+1) = 1 + Sn" is true or not?
The answer from this question is it is not true, and it gave that "S due (n+1) = (1+i)^n + Sn". However, I can't clarify this. I can only show that "S(n+1) = (1+i)^n + Sn". Does the answer given is incorrect? or I actually my own answer is incorrect?

Please correct me, because these type of concept struggle me a lots!

Thanks for your help.

Cheers,
Jacq

 

[avanbuiten]

Hi,
there is a question asking whether "S due (n+1) = 1 + Sn" is true or not?
The answer from this question is it is not true, and it gave that "S due (n+1) = (1+i)^n + Sn". However, I can't clarify this. I can only show that "S(n+1) = (1+i)^n + Sn". Does the answer given is incorrect? or I actually my own answer is incorrect?

Please correct me, because these type of concept struggle me a lots!

Thanks for your help.

Cheers,
Jacq

I think all of the above formula is wrong! (But i could be wrong!!!)

Haven't done this subject for a couple of years now, but I think your answer may be wrong.
I would suggest that:

S(n+1) = 1 + S(n)*(1+i)


Surely the difference between S(n+1) and S(n) is that S(n+1) is compounded one year extra into the future - both start at the same time, hence we get S(n)*(1+i), but S(n+1) also has one additional payment at the end of the final year, (which therefore recieves no interest) hence +1.

Since both our formulae involve only s(n) (and not S due), you can check this by working through a practical example using the values for S(n) and S(n+1), from the actuarial tables.

The reason why:

S due (n+1) = 1 + Sn, is false is because:

The RHS has not been compounded at all (which it needs to be), to reflect that S due (n+1) earns an extra years interest on all payments than S(n) (since payments are made one year earlier).

The correct answer is in my opinion is : S due (n+1) = (1+i)^(n+1) + S(n)*(1+i)

E.g.

S(4) = (1+i)^3 + (1+i)^2 + (1+i) + 1

S due (4+1) = (1+i)^5 + (1+i)^4 + (1+i)^3 + (1+i)^2 + (1+i)

= (1+i)^5 + (1+i) * [ (1+i)^3 + (1+i)^2 + (1+i) + 1 ]

= (1+i)^(4+1) + (1+i)*S(4)

=(1+i)^(n+1) + (1+i)*S(n)

So it would seem I do not agree with the given solution either. Perhaps a tutor could clatify for us?

Hope that helps!

 

[Muppet]

the original expression in the question: sdue(n+1)=1+s(n) is wrong.

The alternative in the solution is also wrong: sdue(n+1)=(1+i)^n+s(n)

The two alternatives you give are both correct.
so s(n+1)=(1+i)^n + S(n)
and sdue(n+1) = (1+i)^(n+1) + (1+i)S(n)

since the second is just the first multiplied by (1+i).

The nice relationship which I expect the original was supposed to be a "play" on is:
s(n+1) = 1 + sdue(n)

 

[kippy]

Hi John,

Just in chapter 3 now. Does this apply to the 2011 content as well?

Kippy

The CT1 course is quite algebraically heavy (especially in Chapter 3), but students should note that the exams themselves are mostly just application based.

So in the first few chapters you would be advised to concentrate on undestanding and applying the formulae rather than trying to prove them. Hopefully this advice should save you some time.

How can you tell what is needed?

Well if you read the syllabus objectives (that 1st page of the chapter that you ignore and turn-over ) it will tell you what is needed. Often the objectives say calculate - which tells you that you should just be using the formula rather than trying to derive it.


How can I thank you for this fantastic time saving advice

Well, I accept cheques and VISA!

Do feel free to chat to me if things are still unclear!

 

[John Lee]

Yes.

We're hoping to get the Profession to rewrite the Core Reading for 2012 but...

PS Use our proposed 2012 Core Reading instead then try the calculation questions from the Chapter (not the theoretical questions) or Chapter 3 Q&A bank 1 questions (1.1, 1.2, 1.12, 1.13, 1.15, 1.16, (and Ch2 qns 1.28, 1.29 and 1.32)) or X1 assignment questions (X1.7, X1.8 (and Ch2 qns X1.2, X1.3)).

At the end of the day you need to be able to convert from convertible and force to effective and simple rates. You also need to be able to accumulate or discount payments given a convertible rate or a force of interest.

Hi John,

Just in chapter 3 now. Does this apply to the 2011 content as well?

Kippy

 

[Faldoo]

The CT1 course is quite algebraically heavy (especially in Chapter 3), but students should note that the exams themselves are mostly just application based.

So in the first few chapters you would be advised to concentrate on undestanding and applying the formulae rather than trying to prove them. Hopefully this advice should save you some time.

How can you tell what is needed?

Well if you read the syllabus objectives (that 1st page of the chapter that you ignore and turn-over ) it will tell you what is needed. Often the objectives say calculate - which tells you that you should just be using the formula rather than trying to derive it.


How can I thank you for this fantastic time saving advice

Well, I accept cheques and VISA!

Do feel free to chat to me if things are still unclear!

I remember when I studied CT1 (sat it in April 2010), I really struggled with Chapter 3 initially. It was at that point, I was thinking "what have I let myself in for!"

 

[stylz]

PS Use our proposed 2012 Core Reading instead .

Where do we find this?

Thanks

 

[John Lee]

Where do we find this?

Thanks

Drop me an email