7. A net premium of $41 payable for life will provide (x) with either $5,000 n-year terminsurance followed by $1,000 whole life insurance after age x + n, or $3,000 n-year terminsurance followed by $2,000 whole life insurance after age x + n. What is 1000 · Px ?A) 17.37B) 17.47C) 17.57D) 17.67E) 17.77

Part 2: Explanation:Step 1: Let's denote the present value of the premium as PV, the present value…

Answered: 7. A net premium of $41 payable for…

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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Which of the following is the correct calculation of insurance premium? a. (Premium/1,000) x table rate b. (Face value/1,000) x table rate c. (1000/Face value) x table rate d. (Table rate/1,000) x Face value
For a fully discrete whole life insurance of 100,000 on (45): (i) whole life annuity on 45, a45 = 14.85 (ii)i= 0.06 Calculate the annual net premium.
Calculate the annual premium for the following policy. (Use Table 20.1.) Amount of coverage (face value of policy) Age and sex of insured Type of insurance policy Annual premium $200,000 42 (M) 20-payment life
What is the PV of an ordinary annuity with 10 payments of $7,800 if the appropriate interest rate is 5.5%? Select the correct answer. a. $58,823.08 Ob. $58,815.68 $58,793.48 d. $58,808.28 e. $58,800.88
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An survival model is given by the survival function S₁(x) = e Suppose a whole life insurance policy with a benefit of $118250 payable immediately at the time of death of the insured life has a continuously compound interest rate 8 -0.026. (a) What is the present value for the benefit if the policy is purchased at age 42? EPV = $ a= 0.0008 (b) What is the standard deviation of the present value of this insurance benefit if the policy is purchased at age 42? Note: Round your answer to two decimal places.
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Present value of an annuity Consider the following cases. Case ◄AUA- E Amount of annuity $ 12.000 55.000 700 140.000 22.500 Interest rate 12 20 5 10 Period (years) a. Calculate the present value of the annuity assuming that it is (1) An ordinary annuity, mu 9 7 b. Compare your findings in parts al 1) and a(2). All else being identical, which of annuity-ordinary or annuity due-is preferable? Explain why. Personal Finance Problem Tume value-Annuities - Marian Kirk wishes to select the better of two 10-year annuines, C and D. Annuity C is an ordinary annuity of $2,500 per year for 10 years. Annuity D is an annuity due of $2,200 per year for 10 years. delen future value of both annuities at the end of year 10, assuming that
Exercise 7.1 For a whole life insurance issued to (40), you are given: (i) The death benefit, which is payable at the end of the year of death, is $50,000 in the first 20 years, and $100,000 thereafter. (ii) Level annual premiums are payable for 20 years or until earlier death. (iii) The mortality basis for policy values is the Standard Ultimate Survival Model. (iv) The interest basis for policy values is 5% per year. Calculate the net premium p
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