An insurer issued a large number of policies to women aged 60, where sum insured S = 100,000, level premium P =5,200, 5V = 29,068 and 6V = 35, 324. Five yeaers after they were issued, a total of 450 of these policies were still in force. In the following year, Expenses of 5% of each premium paid were incurred. Interest was earned at i = 4% on all assets. - - Two policyholders died. Expenses of $150 were incurred on the payment of the sum insured for the policyholder who died. (a) Calculate the total asset at the beginning of the 6th year after receiving premiums and paying prem-related expenses. (b) Calculate the total amount the insurer requires at the end of the 6th year.
An insurer issued a large number of policies to women aged 60, where sum insured S = 100,000, level premium P =5,200, 5V = 29,068 and 6V = 35, 324. Five yeaers after they were issued, a total of 450 of these policies were still in force. In the following year, Expenses of 5% of each premium paid were incurred. Interest was earned at i = 4% on all assets. - - Two policyholders died. Expenses of $150 were incurred on the payment of the sum insured for the policyholder who died. (a) Calculate the total asset at the beginning of the 6th year after receiving premiums and paying prem-related expenses. (b) Calculate the total amount the insurer requires at the end of the 6th year.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:An insurer issued a large number of policies to women aged 60, where
sum insured S = 100,000, level premium P =5, 200, 5V = 29,068 and
6V = 35, 324. Five yeaers after they were issued, a total of 450 of these
policies were still in force. In the following year,
Expenses of 5% of each premium paid were incurred.
Interest was earned at i = 4% on all assets.
Two policyholders died.
Expenses of $150 were incurred on the payment of the sum insured
for the policyholder who died.
(a) Calculate the total asset at the beginning of the 6th year after
receiving premiums and paying prem-related expenses.
(b) Calculate the total amount the insurer requires at the end of the 6th
year.
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