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Lab 4

# Lab 4 - Math/Stat 170 Lab Project 4 Pricing a Term Policy...

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Math/Stat 170 Lab Project 4 Pricing a Term Policy This project builds on Labs 2 and 3. In this Lab, we will assume that Purdue Life sells a 30 year term insurance policy with a death benefit of \$10,000 and an annual premium of \$100/year, payable on January 1. You will discover that \$100 is too little to charge for this policy. In this project, you will estimate what the actual premium should be. As in Lab 3, you will use a mortality table to estimate the number of individuals dying each year. We will assume that all people die at the end of the year on December 31. We will compute a running total of the profit/loss for Purdue Life for the stated premium. We will then adjust the premium until our profit is as close to zero as possible. This tells us the minimum we should charge for this policy. A sample output is shown on the next page. Part 1: Your first assignment is to reproduce the sample output. Notes: 1. The sample output is based on the policies being issued to a male age 61. Column B should be a formula which changes when you change cell I8.

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Lab 4 - Math/Stat 170 Lab Project 4 Pricing a Term Policy...

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