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General formula for life annuities

E

Elizabeth Murphy

Member
I just wanted to check if we will only be asked to calculate life annuities for AM92 and the PMA/PFA92 tables and not from ELT15, as most of the formulas can be manipulated using adoubledotx which is given in bot of them but not in the ELT15. If we can asked to do it from ELT15 what is the formula we would use to get our initial annuity to feed into the formulas?

Thanks
 
Hi Elizabeth
You could easily calculate the EPV of an annuity based on ELT15 mortality using a spreadsheet. Assuming that the amount of each payment is 1, you'd just need a column for time of payment, a column for discount factor, v^n, and a column for probability of payment, l(x+n)/lx. Multiply the discount factor by the probability and then sum over all possible payment times.

Remember also that e(circle)x = a(bar)x @0% interest and that values of a(bar)x:<65-x> are given on p136 (ELT15 (Males), 4% int) and p140 (ELT15(Males), 6% int).

Julie
 
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