Hi All, Exam on this tomorrow, so an answer today would be greatly appreciated! Looking at calculation the income vs outgo in present value terms. In the examiners report, it states that PV of income at 5% interest = £25.7 million PV of outgo at 5% interest = £25.5 million Would someone please show me how these figures came about, as can't seem to get there! Thanks a million Sarah Exam paper and report links are here: http://www.actuaries.org.uk/researc...ations-exam-paper-day-1-revenue-subscriptions http://www.actuaries.org.uk/researc...ions-examiners-report-day-1-revenue-subscript
You're given the annual figures for the out go, so sum: 5.8/1.05 + 6/1.05^2 etc. (discount by 5% pa) = 25.47 or 25.5 rounded Similarly you're given a project of student no.s by category & year and cost by category so you can multiply. (Note the order is 'reversed' with the years). so sum: 5.75/1.05 + 5.85/1.05^2 etc. to give 29.689 or 29.7 rounded. HTH. edit: sorry, saw you needed this by today. hope it went well!
