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Mortality follows De Moivre's Law with =120. A 10 year temporary annuity due is issued to (90) which pays 5000 annually. The actuarial present value
Mortality follows De Moivre's Law with =120. A 10 year temporary annuity due is issued to (90) which pays 5000 annually. The actuarial present value for this life annuity is calculated based on an annual effective interest rate of 6%. Alternatively, (90) can elect a whole life annuity due which pays 5000 annually. The actuarial present value for this life annuity equals that of the first option provided the annual effective interest rate is i. Find
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