Question: Please help me solve this question. Thanks a lot! 1. [9 marks] A group of 100 people, all age 60 have set up a fund
Please help me solve this question. Thanks a lot!
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1. [9 marks] A group of 100 people, all age 60 have set up a fund that will pay 1,000 to a named beneciary at the end of the year of their death. Each person will agree to pay an amount equal to the expected present value of the death benefit for the whole life insurance. Mortality and Interest will follow the Illustrative Life Table with i = 6%. a. Determine the amount of the fund at inception [time t = 0]. [2 marks] b. Determine the expected size of the fund at the end of4 years. [3 marks] c. Now suppose that the actual experience of the fund in the first 4 years was as follows: 0 no deaths in years 1 and 3, 1 death in year 4, and 2 deaths in the 2nd year. I interest earned was 9% in the first year, 8% in the second and third years, and 6% in the fourth year
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