SOA Exam FAM Sample Question 6.47
Study guide: Exam FAM
For a 10-year deferred whole life annuity-due with payments of 100,000 per year on (70), you are given:
(i) Annual gross premiums of G are payable for 10 years
(ii) First year expenses are 75% of premium
(iii) Renewal expenses for years 2 and later are 5% of premium during the premium paying period
(iv) Mortality follows the Standard Ultimate Life Table
(v) i = 0.05
Calculate G using the equivalence principle.
[A modified version of Question 8 on the Fall 2017 exam]
- A) 64,900
- B) 65,400
- C) 65,900
- D) 66,400
- E) 66,900
Answer this question and see the worked solution