Solve this easy question Consider a fully discrete 5-year term insurance issued to a selected life aged 60, with sum $100000.Assume that mortality follows the Standard Select Life Table, and assume an interest rate of 5%per year.(a) Calculate the net annual premium.(b) Calculate the probability that the contract makes a profit.

Answered: Image /qna-images/answer/f7b8c876-a66e-4e20-b2e1-8ad534cf2158.jpg

Answered: Consider a fully discrete 5-year term…

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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Similar questions

An annuity is a sum of money that is paid in regular equal payments. The __________ of an annuity is the sum of all the individual payments together with all the interest.
What is an annuity?
Ryan who is (65) receives an annuity as his pension benefit. The annuity is a 10 year certain and life annuity which pays 50,000 at the beginning of each year. The first 10 payments are guaranteed to be made even if Ryan dies prior to the payment. After 10 payments, payments are only made if Ryan is alive. You are given that mortality follows the Standard Ultimate Life Table with interest at 5%. Calculate the Actuarial Present Value of Ryans pension benefit. LTAM question calculate APV
A life insurance company issues a whole life annuity immediate with annual payments. The annuity is issued to (65). The annuity pays 50,000 at the end of each year for the life of the annuitant with the first payment being made at age 66. You are given: A single premium is paid to purchase this annuity. Mortality follows the Illustrative Life Table with i = 0.06. %3D Assume that the single net premium, P, is 1 of the expected present value at issue of benefits. Calculate the probability that this policy will generate a profit using P.
Larry purchased an annuity from N insurance company that promises to pay him $2,000 per month for the rest of his life. Larry paid $210,240 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of $2,000 this month. How much of the first payment should Larry include in gross income?
2. Suppose the probability a plant is destroyed in year 1 is 2% and the probability a plant is destroyed in year 2 assuming it was not destroyed previously is 4%. When the plant is destroyed, it would cost $249219 to replace. Assumed the interest rate is 5%, what is the expected replacement cost, round to nearest dollar? You'll need to find the expected cost each year and discount them at 5%.
de 2. The following are the annual premiums charged by the Life Insurance Corporation of India for a policy of Rs. 1,000. Calculate the premium payable at the age of 26. Age in years 20 25 30 35 40 Premium (Rs.) 23 26 30 25 42

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