In the solution, for the EPV(Benefits) the amount 131,250 is applied to the pure endowment component of the equation. Where is this amount coming from? I can see that 131,250 = 75,000 × 1.75 but it's not clear to me why this would be applied here...
The initial sum assured is 75k. But this increases every year by a 3% simple bonus, for 25 years. So the final payment is 75k * (1 + 0.03*25).
