Malebo is thinking of buying an R18, 000 whole life insurance policy. The annual premium for the coverage will be R250.00. The policy is active, and based on the insurer's previous experience with similar policies, the company is expected to pay R815 in dividends during the first twenty (20) years. If these dividends were invested at 8% interest each year for twenty (20) years, the dividends would total R1200. After 20 years, the cash value will be R4500.00. The appropriate annual interest rate for calculations involving the time value of money is 6%.

Required:

Calculate the annual traditional net cost per thousand? [7 marks]

Calculate the annual surrender cost per thousand? [8 marks]