Course 3 May 2001 #34

[Nelle]

Maybe I am missing something here...

This problem says, "mortality based on the Illustrative Life Table" but in the SOA's solution, they solved for A63 and say that it is .4672. But in the table, it is .41085. How can this be???

[Gandalf]

Maybe I am missing something here...

This problem says, "mortality based on the Illustrative Life Table" but in the SOA's solution, they solved for A63 and say that it is .4672. But in the table, it is .41085. How can this be???

Without more complete info, it's hard to say. A value of A63 depends on both the mortality table and interest rate. Were both the .4672 and .41085 supposedly computed at the same interest rate? If so, then give the whole problem and I'll see if I can come up with another theory for the difference.

[Toonces]

In problem 34, they give the interest rate as i=.05, not i=.06. You can only use the tables of A's if i=.06. But the q's are the same regardless of interest rate, so you can only use the mortality assumptions from the table (the l's and q's).

[Nelle]

Ahhh... that makes perfect sense. Thanks!