shineon
November 10th 2009, 11:32 PM
You are given the following information for a 3-year temporary life annuity-due issued to a life age x:
Time t --- Amount of Payment --- px+t
-- 0 -------------- 1 --------------- 0.80
-- 1 -------------- 2 --------------- 0.75
-- 2 -------------- 3 --------------- 0.50
Given that v = 0.9, calculate the actuarial present value of the annuity by both the current payment technique and the aggregate payment technique. Then calculate the probability that the present value of the payments actually made will exceed the actuarial present value of the annuity.
I got the first part to be 3.898, but I can't remember how to calculate the probability part. Any help would be appreciated!
Time t --- Amount of Payment --- px+t
-- 0 -------------- 1 --------------- 0.80
-- 1 -------------- 2 --------------- 0.75
-- 2 -------------- 3 --------------- 0.50
Given that v = 0.9, calculate the actuarial present value of the annuity by both the current payment technique and the aggregate payment technique. Then calculate the probability that the present value of the payments actually made will exceed the actuarial present value of the annuity.
I got the first part to be 3.898, but I can't remember how to calculate the probability part. Any help would be appreciated!