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Long-Term Actuarial Math Old Exam MLC Forum

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  #1  
Old 11-30-2018, 02:40 PM
vandykec vandykec is offline
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Default Probability involving annuity immediate

Given:

3-year term annuity immediate with
present value of term annuity immediate is = 2.690404
standard deviation of term annuity immediate is = 0.535225

How would I find the probability of the present value of the annuity immediate being less than 2.0?
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Old 11-30-2018, 02:53 PM
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Is that everything you are given? Initially it seems like not enough info. You want to calculate 3_p_x (if i > 0).
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Old 11-30-2018, 03:04 PM
vandykec vandykec is offline
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My apologies, 3_p_x = 0.927.
i = 3%
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Old 11-30-2018, 03:12 PM
vandykec vandykec is offline
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Would the answer be 1 - prob of survival to age 3 since annual payments are 1? So, in order for present value to be less than 2, survival to age 3 must not happen? So, the answer would be 0.072?
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Old 11-30-2018, 03:15 PM
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That sounds right.
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Old 11-30-2018, 03:21 PM
vandykec vandykec is offline
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Thank you!
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annuity, present value, probability, standard deviation, variance

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