What is the new present value of the contract

Assignment Help Basic Statistics

Reference no: EM131001993

A life annuity contract on (80) has a present value of 3.14. The annuity benefits at both age 80 and 81 are 1. The interest rate in the first year is 25% and p80 = 0.8. Suppose that the value of p81 increases by 10% while all other mortality rates remain unchanged. What is the new present value of the contract?

Reference no: EM131001993

Questions Cloud

Identify a process internal to the company : Create a high-level AS IS process flow chart using an appropriate tool.

What will the yearly income : What will the yearly income be if, instead of a straight life annuity, he purchases a life annuity with a 10-year guaranteed period?

Classified balance sheet in report form : Prepare a classified balance sheet in report form.

Demand side fiscal policy and supply side fiscal policy : Explain the differences between typical demand side fiscal policy and supply side fiscal policy. For each of the following fiscal policy proposals, determine whether the primary focus is on aggregate demand or aggregate supply or both.

What is the new present value of the contract : Suppose that the value of p81 increases by 10% while all other mortality rates remain unchanged. What is the new present value of the contract?

Government in managing the business cycle : What would happen if no one tried to manage the business cycle? What role do you see for the Executive Branch of the U.S. government in managing the business cycle? How does Fiscal Policy work? What are its limitations?

Characterizes heuristics as fast and frugal : Economist Gerd Gigerenzer characterizes heuristics as "fast and frugal" ways of reaching decisions. Are there any costs to heuristics being "fast and frugal"? Explain and give an example of how a fast and frugal method for doing something in everyday..

Commonalities of mental health services and long-term care : What are the commonalities of mental health services and long-term care? What are the challenges both areas of care continue to face today and in the future?

Disclose the resignation of a board member : What form reviewed in this chapter would be used to disclose the resignation of a board member? Comment on why it would be in the public interest to know the circumstances surrounding the resignation of this board member.

User Account

All Pages