ct010t06 - UNSW ACTL1001 Actuarial Studies and Commerce...

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UNSW ACTL1001 Actuarial Studies and Commerce Tutorial Exercises 6 Exercise 1 Determine the present value of a premium of $ 1000 per month payable in advance for 5 years at an interest rate of 5% p.a. (nominal, quarterly compounding). Exercise 2 Determine the present value of $ 100,000 payable in 5 years time at an effective interest rate of 6% p.a. Exercise 3 A pure endowment policy with a 5 year maturity is issued with a sum assured of $ 100,000. Initial acquisition expenses are $ 8,000. Other expenses are a fixed amount of $ 100 on payment of each premium and 2% of the premium. The interest rate is assumed to be 6% p.a. effective. The premium is a level annual amount paid in advance. Ignore mortality. 1. Calculate the premium allowing for these expenses, 2. Determine the cashflows for each year of the policy giving the revenue and expenses, ignoring interest earnings, 3. Determine the policy liability at the start of each year using a 6% p.a. interest rate,
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This note was uploaded on 06/12/2011 for the course ASB 1001,2522, taught by Professor Nicole during the One '09 term at University of New South Wales.

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ct010t06 - UNSW ACTL1001 Actuarial Studies and Commerce...

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