You are given Using i 005 the actuarial present value of a

You are given: Using i = 0.05, the actuarial present value of a life insurance that pays a unit benefit at the end of the year of death of a life age 60 or upon her survival to age 63, whichever occurs first, is 0.86545. (This is called an endowment insurance.) Calculate the actuarial present value of the endowment insurance in item if the annual effective interest rate is changed to 0.045. (Ans 0.87777)

Solution

0.87777