Quote:
Originally Posted by gunhog
I'm trying to match the age 60 factor of 161.14. I keep getting 162.28. Basically I value each year as follows (ex is second year):
P60 x (1/1.0485)^1 x PV(anty: i = 1.0485^(1/12)1, n=12, pymnt=1/12, imdt anty)
= .9951 x .9537 x .9748 = .9251
I do this for every year up to age 120, using the appropriate segment rates. Anyone see something wrong? Or do you have to apply survivability to each monthly payment, using UDD?

I'm not sure how you are getting the value of 162.28. Now that I got my spreadsheet fixed, I
can give you some more details on the results shown at the beginning of this thread:
Quote:
Originally Posted by Absolutsju
Using Oct 2007 rates (4.77% Treas, 4.85% Spot1, 5.02% Spot2 and 5.09%SPot3)  I calculated the following values to convert an immediate monthly annuity to a lump sum:
50 = 190.1389
55 = 176.8137
60 = 161.1369
65 = 143.5088

Code:
Annual Monthly Monthly Monthly
annuity annuity annuity exact
Due "crude" exact Times 12.0
16.2983 15.83999 15.8449 190.1389
15.1881 14.72975 14.7345 176.8135
13.8821 13.42372 13.4281 161.1373
12.4135 11.95521 11.9591 143.5096
The "crude" value is simply the annual annuity due less 11/24. The exact monthly annuity reflects the effect of the three segment interest rates,
as described in this post.