Calculate P using the equivalence principle.

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter8: Sequences And Series
Section8.4: Mathematics Of Finance
Problem 2E
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5.
are given:
i.
ii.
iii.
For a special fully discrete 5-year deferred 3-year term insurance of 100,000 on (x) you
There are two premium payments, each equal to P. The first is paid at the beginning
of the first year and the second is paid at the end of the 5-year deferral period.
The following probabilities:
i = 0.06
5Px = 0.95
9x+5 = 0.02, 9x+6= 0.03,9x+7 = 0.04
Calculate P using the equivalence principle.
Transcribed Image Text:5. are given: i. ii. iii. For a special fully discrete 5-year deferred 3-year term insurance of 100,000 on (x) you There are two premium payments, each equal to P. The first is paid at the beginning of the first year and the second is paid at the end of the 5-year deferral period. The following probabilities: i = 0.06 5Px = 0.95 9x+5 = 0.02, 9x+6= 0.03,9x+7 = 0.04 Calculate P using the equivalence principle.
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