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PRMIA Exam 8007 Topic 1 Question 71 Discussion

Actual exam question for PRMIA's 8007 exam

Question #: 71
Topic #: 1

[All 8007 Questions]

You invest $100 000 for 3 years at a continuously compounded rate of 3%. At the end of 3 years, you redeem the investment. Taxes of 22% are applied at the time of redemption. What is your approximate after-tax profit from the investment, rounded to $10?

A$9420

B$7350

C$7230

D$7100

Show Suggested Answer

Suggested Answer: B

by Mozell at May 01, 2024, 10:33 PM

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Chau

10 months ago

Yes, B for sure. It’s definitely about the derivative and Taylor series.

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Lorenza

10 months ago

I hate how tricky these questions can be. But B seems logical.

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Mirta

11 months ago

I was confused between B and C. But B makes more sense now.

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Mitsue

11 months ago

Yeah, pretty sure it uses the derivative for finding roots.

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Solange

12 months ago

I think it’s definitely B. It's based on Taylor series and uses the first derivative.

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Sean

12 months ago

Hey, what do you think about the Newton-Raphson method question?

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