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Attained Age Method - death in service benefit costing Assignment x6.4

M

mulita

Member
part b of the question has a solution that includes AAM formula with a denominator of PV of 1% of salary to expected death. I wish to find out why 1% is used in this case. I note that 1% was also used in a question on page 24 under funding methods. Grateful for your help
 
Thanks.. so if PV of expected benefits is 400 000 and PV of expected salary is 1,000,000 then, simple AAM method, without the 1% of salary we get 4/10 which is 0.4, I.e. 40%

If we put 1% to the denominator I.e. 4/(1% of 10) then we get 40, I.e. 4000%

So I still don't quite get it.
 
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