Find the present value suppose that instead of being


You are given q60 =0.20, q61 =0.25, q62 ?=0.40, q63 ?=0.50. The interest rate is a constant 5% for the first 2 years, and 7% after that. A 5 year life annuity on (60) provides for payments of 100(1+k) at time k, where k=0,1,2,3,4. (a) Find the present value. (b) Suppose that instead of being a straight life annuity, the first three annuity payments are guaranteed regardless of whether (60) is alive or not. Find the present value now.

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Financial Management: Find the present value suppose that instead of being
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