Simple annuity calculation

Discussion in 'CT1' started by CA2 student, Jul 19, 2008.

  1. CA2 student

    CA2 student Member

    Hi

    I'm a ST2 student, but I've come across a question that requires some CT1 knowledge and I'm very rusty on this stuff and don't have my old notes to hand :rolleyes: Please can someone remind me why the following is true?

    a''[x](12) = a"[x] - 11/24

    In words:

    Annuity paid monthly in advance = Annuity paid annual in advance - 11/24

    Thanks
     
    CA2 student, Jul 19, 2008
    #1
  2. CA2 student

    CA2 student Member

    Hi

    I've now sorted this out myself. It's an approximation at the top of page 36 of the formula book. And it's from CT5 not CT1. :)
     
    Last edited by a moderator: Jul 20, 2008
    CA2 student, Jul 20, 2008
    #2
  3. bystander

    bystander Member


    Its about the average dates of payment. But why do you need to know? I don't think CA2 would expect you to include it in the documentation as it is deemed standard knowledge.

    Enjoy the course
     
    bystander, Jul 21, 2008
    #3
  4. CA2 student

    CA2 student Member

    I'm doing ST2, not CA2. That's just my username :)
     
    CA2 student, Jul 21, 2008
    #4

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