Hi I was wondering if someone could help me with a query I have. I can't work out how the Cost of increasein reserves is calculated in the question above from year 2 onwards. From looking at the solutions for year 1 the cost of increase in reserves is q(60)P= (1-0.008022)P = 0.9920P Can anyone help me with the same calculation for later years as a breakdown is not provided in the solutions and I can't work it out from the notes. Thanks John
Have a look at the explanation given in the thread below: http://www.acted.co.uk/forums/showthread.php?t=1724
