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Use the SOA-LTAM Standard Ultimate Life Table and interest rate 5% A person aged 35 has just taken out a home mortgage loan where he

Use the SOA-LTAM Standard Ultimate Life Table and interest rate 5%

A person aged 35 has just taken out a home mortgage loan where he will pay $18,000 at the end of each year for 20 years. He was also required to purchase a life insurance policy that will pay any remaining payments should he die within the 20-year period.

(a) If the person dies in the first year, how much is the PV of the death benefit?

(b)Calculate the expected present value of this life insurance policy.

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