1. 

   eaml Member

   I am slightly confused why my attempt isn't working.
   
   For EL I have set up the following equation:
   
   1.4 (RoC) = 1.12P / CP, where P = premium & C = capital as a % of premium
   
   This comes out as C = 80% of premium which is wrong. Can anyone spot where I am making a mistake?

    

   eaml, Sep 5, 2022

   #1
2. 

   Darren Michaels ActEd Tutor Staff Member

   You seem to have an extra 1. in front of both of your expressions:
   
   RoC = profit / capital = 40% and profit / premium = 12%
   
   Thus substituting for profit we get:
   
   40% = (12% * premium) / capital
   
   thus capital = 30% premium

    

   Darren Michaels, Sep 6, 2022

   #2

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