Question

Death can take on the following values

3, 3.5, 4, 4.5, . . . , 79.5, where death at age 3 during the first half-year is counted as 3, death at age 3 in the second half-year as 3.5 etc.

Preliminaries I: Compound interest & present values

Preliminaries II: Expected value

de Witt’s formula for life annuities

Next > < Previous

Sort answers by oldest

• Votes
• Oldest
• Newest

Homework Answers

Answer #1

P(death occurs on or before 62.5)= P(D<=62.5)=P(D=3)+P(D=3.5)+...P(D=52.5)+P(D=53)+...P(D=62.5)

Now,

P(D=l)=1/128 for l=3,3.5,...,52.5

P(D=l)=2/384 for l=53,.,62.5

Thus the required probability is 1/128*101 (since there are total 50 numbers between 3 and 52 both inclusive and a further of 52.5) + 2/384*11 (as there are 10 numbers between 53 and 62 and a further of 62.5)

Thus the required probability is 0.8464.

Since this is an annuity certain we have the present value as v+v^2+v^3+...+v^10 = v(1-v^10)/(1-v)=(1-v^10)/i where i=0.035,v=1/1.035. Thus answer is 8.32.

Know the answer?

Add Answer to:

Death can take on the following values 3, 3.5, 4, 4.5, . . . , 79.5, where death at age 3 during the first half-year is counted as 3, death at age 3 in the second half-year as 3.5 etc. Preliminaries I...

Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Log In

Sign Up

Post as anonymous

Post Your Answer

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.

Similar Homework Help Questions

• PLEASE I NEED HELP IMMEDIATELY GSU Corporation completed these transactions during January of the current year:...

  PLEASE I NEED HELP IMMEDIATELY GSU Corporation completed these transactions during January of the current year: January 1, Began business by selling stock for $725,000.00.   January 1, Rented office space for 1 month using check number 800 for $10,000.00 to Smithlord Properties. (Example posted to cash disbursement journal). January 2, Purchased office furniture and equipment on credit from McKay Company, invoice mck66 dated January 9, terms 2/10, net 30, $20,499.11. (Example posted to purchases journal). January 2, Sold merchandise on...

• Comprehensive Income Tax Course: Module 1 4. Randy turned 16 last year and had his first...

  Comprehensive Income Tax Course: Module 1 4. Randy turned 16 last year and had his first summer job. Even though his parents are claiming him as a dependent he wants to file a return in order to get his refund. He receives his W-2 and decides he can do his own return using form 1040-EZ. Which of the following information is not found on a Form W-2? a) The taxpayer’s Social Security number b) The taxpayer’s wages, tips and other...

• Can someone please tell me what chapters (1-5) these questions are based on? I have already answered the questions and u...

  Can someone please tell me what chapters (1-5) these questions are based on? I have already answered the questions and understand how to solve the material, but i want to be able to pinpoint where i can find this info. in the book. I am using Brigham’s Fundamentals of Financial Management (pictures attached). If it is hard to read, please let me know. i will post better pictures. i know the time vale of money stuff already EDIT: HERE IS...

• All of the following questions are in relation to the following journal article which is available...

  All of the following questions are in relation to the following journal article which is available on Moodle: Parr CL, Magnus MC, Karlstad O, Holvik K, Lund-Blix NA, Jaugen M, et al. Vitamin A and D intake in pregnancy, infant supplementation and asthma development: the Norwegian Mother and Child Cohort. Am J Clin Nutr 2018:107:789-798 QUESTIONS: 1. State one hypothesis the author's proposed in the manuscript. 2. There is previous research that shows that adequate Vitamin A intake is required...

• 10. Write a one-page summary of the attached paper? INTRODUCTION Many problems can develop in activated...

  10. Write a one-page summary of the attached paper? INTRODUCTION Many problems can develop in activated sludge operation that adversely affect effluent quality with origins in the engineering, hydraulic and microbiological components of the process. The real "heart" of the activated sludge system is the development and maintenance of a mixed microbial culture (activated sludge) that treats wastewater and which can be managed. One definition of a wastewater treatment plant operator is a "bug farmer", one who controls the aeration...

• I need Summary of this Paper i dont need long summary i need What methodology they used , what is the purpose of this p...

  I need Summary of this Paper i dont need long summary i need What methodology they used , what is the purpose of this paper and some conclusions and contributes of this paper. I need this for my Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS PLEASE !!!) Budgetary Policy and Economic Growth Errol D'Souza The share of capital expenditures in government expenditures has been slipping and the tax reforms have not yet improved the income...

• CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in...

  CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in Appendix A. Required: Compute the following ratios for Year 11. Liquidity ratios: Asset utilization ratios:* a. Current ratio n. Cash turnover b. Acid-test ratio 0. Accounts receivable turnover c. Days to sell inventory p. Inventory turnover d. Collection period 4. Working capital turnover Capital structure and solvency ratios: 1. Fixed assets turnover e. Total debt to total equity s. Total assets turnover f. Long-term...

• How can we assess whether a project is a success or a failure? This case presents...

  How can we assess whether a project is a success or a failure? This case presents two phases of a large business transformation project involving the implementation of an ERP system with the aim of creating an integrated company. The case illustrates some of the challenges associated with integration. It also presents the obstacles facing companies that undertake projects involving large information technology projects. Bombardier and Its Environment Joseph-Armand Bombardier was 15 years old when he built his first snowmobile...

• Using the book, write another paragraph or two: write 170 words: Q: Compare the assumptions of...

  Using the book, write another paragraph or two: write 170 words: Q: Compare the assumptions of physician-centered and collaborative communication. How is the caregiver’s role different in each model? How is the patient’s role different? Answer: Physical-centered communication involves the specialists taking control of the conversation. They decide on the topics of discussion and when to end the process. The patient responds to the issues raised by the caregiver and acts accordingly. On the other hand, Collaborative communication involves a...

Answer 1

P(death occurs on or before 62.5)= P(D<=62.5)=P(D=3)+P(D=3.5)+...P(D=52.5)+P(D=53)+...P(D=62.5)

Now,

P(D=l)=1/128 for l=3,3.5,...,52.5

P(D=l)=2/384 for l=53,.,62.5

Thus the required probability is 1/128*101 (since there are total 50 numbers between 3 and 52 both inclusive and a further of 52.5) + 2/384*11 (as there are 10 numbers between 53 and 62 and a further of 62.5)

Thus the required probability is 0.8464.

Since this is an annuity certain we have the present value as v+v^2+v^3+...+v^10 = v(1-v^10)/(1-v)=(1-v^10)/i where i=0.035,v=1/1.035. Thus answer is 8.32.