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

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
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?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Solution to 2.6.4
Background image of page 2
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:
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
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
Background image of page 4
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):
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 15

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

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online