ASM PE#3, Question 17

[AJB1011]

Hi,

Why is 10E55:65 not equivalent to (10E55)*(10E65) using ILT?

The solution in the manual says that this value is 0.348709.
Using my approach, I would get (0.48686)*(0.39994) = 0.194715.
_________

Assuming that I got correct value for the endowment insurance of 0.561551. Can someone tell me why solving for the annual benefit premium this way is incorrect?

Prem*(last survivor annuity due of 55 and 65) = 0.561151

last survivor annuity due 55 and 65 = annuity due on 55 + annuity due of 65 - joint annuity due 55:65

=12.275 + 9.8969 - 8.8966
=13.2761

Prem*13.2761 = 0.561551
Prem = 0.042298

[AJB1011]

Originally Posted by AJB1011

Hi,

Why is 10E55:65 not equivalent to (10E55)*(10E65) using ILT?

The solution in the manual says that this value is 0.348709.
Using my approach, I would get (0.48686)*(0.39994) = 0.194715.

Nevermind on this part... Figure it out. By calculating it the way I proposed, I'd be double counting the v^10.