Reference no: EM133077556

Consider two people age 40.a. What is the expected number of years that both are alive?b. What is the expected number of years that at least one is alive?c. What is the actuarial present value of a pension that pays $50,000 per year aslong as at least one of the two 40-year-old people survive? Use a 5% discount rate.[Remember actuarial present value means that you must discount in the usual wayto get present value, but you also must weight (i.e., multiply) every yearly paymentby the probability that at least one of the two 40-year-old people is alive in order toreceive the $50,000 payment.]

A B Number of Age Survivors
0 100000
1 99249
2 99193
3 99155
4 99126
5 99102
6 99083
7 99066
8 99051
9 99035
10 99019
11 99001
12 98983
13 98963
14 98938
15 98906
16 98860
17 98791
18 98700
19 98580
20 98444
21 98311
22 98163
23 98023
24 97888
25 97752
26 97624
27 97489
28 97359
29 97224
30 97092
31 96954
32 96818
33 96677
34 96522
35 96359
36 96180
37 95997
38 95791
39 95569
40 95337
41 95087
42 94825
43 94542
44 94229
45 93892
46 93529
47 93142