1、Suppose Y aT is the random present value variable for a continuous life annuity of $1 per
year to (x). Assume δ 0.05 and that the future life time variable T has p.d.f given by
f T (t) 0.015e−0.015t ,t =≥0
a) calculate ax by either the aggregate or payment method
b) What is the probability that a fund of ax at age x is sufficient to withdraw $1 per year
continuously for us as long as (x) lives?
c) What is the possible range of value of Y?
d) What event in terms of T is equivalent to 5 ≤Y ≤10 ?
e) What is the Pr(5 ≤Y ≤10) ?
2
2 、If Ax 0.06 and Ax 0.01 and Yis the present value variable for a continuous
$1000 per year life annuity to (x), find E (Y ) and δ assuming δ =0.05 .
T
3、Suppose 100 lives age x are paid $1000 per year continuously while the survive. How big a
fund is needed at the time of simultaneous issue in order to by 90% certain of having enough
money to pay the life annuities? Assume that the present value variable Y is as in Qusetion 2 and
use the central limit theorem on Yagg, the aggregate present value variable.