Hello!
I'm a little confused with the question 6.13 on page 28 of chapter 6.
In the question they have mentioned that the policy is subjected to simple reversionary bonus that vest at the START of each year.
Also, it has been stated on page 26 that while calculating the net premium reserve, the total bonus amount includes bonuses added up to and INCLUDING time t.
According to that, we must have 8 bonuses, 600 for the first year and 562.5 for the rest, as we must also include the bonus at the 7th year.
But in the solution, we have accounted for only 7 bonuses.
Please help me with it.
Thanks in advance
Last edited by a moderator: Jul 16, 2018