AM2.78

# AM2.78 - Example 2.6.4 You are given i = 0.08 The NSP for a...

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Example 2.6.4 You are given: i = 0.08 The NSP for a 30-year life annuity due paying \$20,000 a year issued to (30) is \$236,599.40 The NSP for a 10-year life annuity due paying \$20,000 a year issued to (50) is \$140,073.82 The probability that (30) survives to at least age 50 is 0.93369 What is the NSP for a 20-year life annuity paying \$50,000 a year issued to (30), first payment due at age 31?

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Solution to 2.6.4
Varying Benefits (section 2.7) All examples so far have assumed the annual benefit of a life annuity is the same each year However, it is common for benefits to increase (or decrease) after several years There are two ways to solve varying benefit life annuity problems:

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1. Using deferred annuity symbols assumes ( x ) is buying distinct, non- overlapping annuities 2. Not using deferred annuity symbols assumes ( x ) is buying several annuities, all beginning at age x
Example 2.7.1 (repeat of example 2.6.3) (35) wants to buys a life annuity with the following annual benefits (starting at age 35):

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AM2.78 - Example 2.6.4 You are given i = 0.08 The NSP for a...

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