Tutorial 6

Actuarial Mathematics I (ASC425)

December 2020
CS2423A & CS2423B

Question 1
Find the expectation and variance of the present value of all payments to be made under a continuous
life annuity if (20) dies at time t. Assume mortality follows de Moivre’s laz with 𝜔 = 100 and that
𝛿 = 0.10.
(ans: 4.687)
Question 2
If mortality follow de Moivre’s law with 𝜔 = 100 and 𝛿 = 0.10, find the actuarial present value of
RM1,000, 20-year temporary life annuity issued to (30).
(ans: 7798)

Question 3
Given 𝐴𝑥 = 0.24, 𝐴𝑥+20 = 0.40, 20𝐸𝑥 = 0.30 and 𝑑 = 0.08. Find 𝑎̈ 𝑥:20|
̅̅̅̅̅ .
(and: 7.25)

Question 4
Given that the future lifetime of (𝑥) follows de Moivre’s mortality assumption on [0, 95]. If 𝛿 = 0.06,
find 𝑎̅25 .
(ans: 12.76)
Question 5
Whole life insurance of RM1,000 on age (60) and age (61) issued on 1st January 2013. Calculate the
actuarial present value on 1st January 2013 of the insurance at age (61) for the following plans:

i) Death benefits are payable at the end of the year of death.

ii) The interest rate is 0.08 for 2013 and 0.04 for 2014 and thereafter.
iii) 𝑞60 = 0.09 and 𝑞61 = 0.015

The actuarial present value on 1st January 2013 of the insurance age (60) is 450.
(ans: 402.93)