Question on "The actuary and IBNR"

[teddybear]

I have a question with the article "The actuary and IBNR". On page 184, ".... If the extra $200,000 of development is due to a deterioration in the 3rd to 4th report and exposure has been increasing 30% per year, the 1971 IBNR reserve should be $3,039,000 rather than $1,950,000....."

Where does the 3,039,000 come from? Thanks.

[Super Silver Haze]

I only wrote Exam 6 last year, but I've seen other people asking your question a few times already, and I understand it gets asked a LOT.

There's an explanation in here:

http://www.casact.org/forum/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=10&t=000073