Death for (x) is distributed such that the probability that an individual dies in the next 3 months is always the same regardless of their age. The probability that (x) will survive for 5 years is 35.8486%. What is the APV (the EPV) of the payout of a 1.5 year term life insurance policy on (x) if it pays $100,000 at the end of a quarter in which (x) dies? Use an annual interest rate of 9% compounded monthly (that's not a typo; I am giving you the monthly rate).
Death for (x) is distributed such that the probability that an individual dies in the next 3 months is always the same regardless of their age. The probability that (x) will survive for 5 years is 35.8486%. What is the APV (the EPV) of the payout of a 1.5 year term life insurance policy on (x) if it pays $100,000 at the end of a quarter in which (x) dies? Use an annual interest rate of 9% compounded monthly (that's not a typo; I am giving you the monthly rate).
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.3: Geometric Sequences
Problem 81E
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 7 images
Recommended textbooks for you
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
Intermediate Algebra
Algebra
ISBN:
9781285195728
Author:
Jerome E. Kaufmann, Karen L. Schwitters
Publisher:
Cengage Learning
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL