Hi guys, for some reason I can't wrap my head around this solution. Any help would be appreciated What is the reasoning behind calculating ¯a 40:50:20 and ¯a40:50:30? Why do we find a proportion between the the above values for the initial level annual premium?
since premium has been broken as follows for first 20 years it is 1 then it reduced to 0.75 so for first 20 years it acts like this (0.25+0.75) and then in the last 10 years it is 0.75 ¯a 40:50:20 *0.75 and ¯a40:50:20*0.25 = ¯a 40:50:20 *1? and for the last 10 years = ¯a 40:50:30 *0.75 which is being covered by ¯a 40:50:30 *0.75
crystal clear but I had to draw a timeline to see it. Is this how you do it or you now have the vision to see how to do it in the exam. Thanks Mohit
in some cases i also make the time line, where the things are not possible on hands, but here we have other ways of doing as well its not the only way to do it. so may be if i adopted another way, so time line may not be required, let me tell you while giving the exam we are in quite hurry so sometime vision not work than time line, but if the vision is working continuously during the exam, then vision saves time which is used in making the time line.
