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Reversionary Annuity Type 4

W

wzlee12

Member
Dear all,

Can someone please explain to me the circled part for this annuity? I do not get the logic behind it. In case anyone needs its location in the notes, it is in Chapter 9, page 24.

Hopefully someone can help me ASAP. Thank you very much! :)
 

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Dear all,

Can someone please explain to me the circled part for this annuity? I do not get the logic behind it. In case anyone needs its location in the notes, it is in Chapter 9, page 24.

Hopefully someone can help me ASAP. Thank you very much! :)

Tricky one! I've scribbled my working attached - see if that helps!
Robert
 

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Sir,

The only thing that I do not understand is why the working has beyond time n while the payment to y after x died has a maximum of n years? Appreciate your help here though.

Regards,
Wei Zhe.
 
In the section with the integrals, it looks to me as though Robert has set n = 10. Just imagine the 10 to be n for the general case.

In the first integral set up, t is the variable of integration. It relates to the time at which an annuity payment may be being made to y. The payments to y are made so long as y is alive and x died less than n years ago. Since x can die at any point in the future, a payment to y can be being made at any time in the future (ie there is no upper limit on t, the time at which the payment may be being made), eg if x dies at time 50, the payments to y will be from time 50 to time 50+n (so long as y is alive).
 
Thank you both tutors for the help! I will do my best! :)

WZ.
 
Yes, sorry, I did mean n, I don't know why I used 10 o_O. Apologies for confusing. Good luck.
 
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