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Q&A Bank Qu 1.11 (ii) 2008

A

Amy07

Member
Hi everyone,

This is my first post so bear with me if it's not very clear...!!

I have used a different method (which I thought was perfectly valid) but it gives me a different answer to the given solution. If anyone can shed any light on why it's different I would be most grateful as it's driving me slightly mad...!!

Question
Evaluate A68:2 using AM92 and interest rate at 6% pa.

My Answer
My answer uses A68:2 = A'68:2 + A"68:2 (where the first is assurance with the life dying and the second is an assurance with the life surviving). This gives me an answer of 0.90821.

Given Answer
A68:2 = vq68 + v^2 * p68
This gives an answer of 0.89106.

I understand where the given answer comes from, I just don't understand why my answer isn't the same!! :(

Any help much appreciated!!
 
If I understand you correctly,

A68:2 is a endowment assurance payable at end of year of death or at end of 2 years if sooner.

A'68:2 (payable if live dies) = v q68 + v^2 p68 * q69
A"68:2 (payable on survival) = v^2 * 2p68
= v^2 * p68 * p69

If that's what you did it should be correct since they are the same (adding and factorising with (q69+p69=1)). Sometimes with these questions you may get slightly different answers due to rounding errors.
 
Please tell me this is not a CT4 question, because if it is, I havent come across this in the notes..

.. same goes for the Central rates of mortality and population projections type questions which i see from past year papers.
 
Looks like CT5 to me, so no need to worry Jensen. :)

Though central rates of mortality are in the core reading, and have come up in exams fairly recently.
 
Apologies!!

I did indeed post this is the wrong Forum. Sorry for worrying you!!!
 
didster said:
If I understand you correctly,

A68:2 is a endowment assurance payable at end of year of death or at end of 2 years if sooner.

A'68:2 (payable if live dies) = v q68 + v^2 p68 * q69
A"68:2 (payable on survival) = v^2 * 2p68
= v^2 * p68 * p69

If that's what you did it should be correct since they are the same (adding and factorising with (q69+p69=1)). Sometimes with these questions you may get slightly different answers due to rounding errors.
Click to expand...

Didster,

Thanks for your reply, even though I posted in the wrong place!!!

I then used (A68 - D70/D68 * A70) + D70/D68. I looked the relevant values up in the table and got my answer of 0.90821.
 
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