Question

2. For a special fully discrete 10-payment whole life insurance on (30) with level annual net premium P: (i) The death benefit is equal to 1000 plus the refund, without interest, of the net premiums paid. (ii) i = 0.04 (iii) A30 = 0.30 (iv) 30. 10 = 0.014 (v) (14)zo:707 = 0.048 (vi) ä30:101 - 8.5 Calculate P

Answer 1

Every Year premium series: 1000+P, 1000+2P, 1000+3P,..........,1000+10P

The adjusted present value (APV) of the series: 1000*A₃₀+ P*
(IA) 30:16
+ 10P*
(A) 30:10

=1000*030+ P*0.078+ 10P*0.014

= 300+0.218P

From the equivalence equation:

APV of premium= P* $\ddot{a}_{30:\bar{10\mid }}$

300+ 0.218P= 8.5P

8.282P= 300

P= 36.223 Ans.