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Lecture Notes in Actuarial Mathematics A Probability Course for the Actuaries A Preparation for Exam P/1 Marcel B. Finan. In memory of my parents August 1, 2008 January 7, 2009. Preface The present manuscript is designed mainly to help students prepare for the Probability Exam (known as Exam P/1), the rst actuarial examination ad-ministered by the Society of Actuaries. This examination tests a Solution: The interest charges for years 1 and 2 are both equal to 2,000Г—0.08 = $160. The accumulated amount at the end of year 3 is 2,000(1+0.08Г—3) = $2,480. 2 вЂў For the compound-interest method the accumulated amount over a period of time is the principal for the next period. вЂў The accumulation function becomes

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