Determine the absolute value of the error of lukes estimate

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Reference no: EM131508045

Luke, a nonactuary, estimates the actuarial present value for a continuous whole life policy with a benefit of 100,000 on (30) by calculating the present value of 100,000 paid at the expected time of death. You may assume (30) is subject to a constant force of mortality, mu (x) = 0.05, and the force interest is delta =0.08. Determine the absolute value of the error of Luke's estimate.

Reference no: EM131508045

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