A
AdamCll
Member
Sorry if this is in the wrong forum, I just finished an exam at University and even with the study material and lecture notes I can't seem to solve this question, if anyone would let me know how it's done, or what my next steps should be I'd appreciate it.
The question
A life office issues a 10-year endowment assurance policy to a male life aged 40 exact. The sum assured of £10,000 is payable immediately on death and premiums are payable annually in advance for the term of the policy or until his earlier death.
a) Calculate to 2 decimal places, the annual premium given:
Interest 3% per annum
The annuity (no idea how to insert it on here) part for the premium = 8.608 at 3% per annum interest
Expenses nil
b) Calculate to 2 decimal places, the prospective reserve of this policy on the premium basis after 3 years given (the annuity after 3 years, lasting 7 more years) = 6.329
My working out is as follows for part a
And then that's where I got stuck, I can't find a way to value the pure endowment part without using any sort of tables or conversions.
The question
A life office issues a 10-year endowment assurance policy to a male life aged 40 exact. The sum assured of £10,000 is payable immediately on death and premiums are payable annually in advance for the term of the policy or until his earlier death.
a) Calculate to 2 decimal places, the annual premium given:
Interest 3% per annum
The annuity (no idea how to insert it on here) part for the premium = 8.608 at 3% per annum interest
Expenses nil
b) Calculate to 2 decimal places, the prospective reserve of this policy on the premium basis after 3 years given (the annuity after 3 years, lasting 7 more years) = 6.329
My working out is as follows for part a

And then that's where I got stuck, I can't find a way to value the pure endowment part without using any sort of tables or conversions.