CQ insurance company issues life annuities. It prices these annuities using the following probabilities.

Survival probability

Year
1	0.93
2	0.72
3	0.4
4	0

The annuities pay $50,000 at the end of each year while the policyholder is alive. CQ insurance believes it can earn 9% p.a. interest on investments. CQ insurance has an initial cost of $50 at the date of issue.

(a) What is possibility of the policyholder to be alive at the start of Year 3?

Select one:

a. 0.27

b. 0.05

c. 0.6696

d. 0.2604

(b) What is the policyholder's probability of dying in Year 3?

Select one:

a. 0.2604

b. 0.6696

c. 0.3304

d. 0.4018

The annuities pay $50,000 at the end of each year while the policyholder is alive. CQ insurance believes it can earn 9% p.a. interest on investments. CQ insurance has an initial cost of $50 at the date of issue.

(c) Calculate the fair single premium value which is paid on the issue date of this policy. Round your answer to two decimal places.

Select one:

a. 78718.08

b. 88454.70

c. 81231.08

d. 78668.08