Table 1: Survival probability Year Probability of surviving from start of year to end of year
Year 1 - 0.75
Year 2 . - 0.58
Year 3 - 0.37
Year 4 - 0.23
Year 5 - 0 e.
Jackson will use $50,000 from the total sale proceed of instruments as a single premium to purchase an annuity today. This annuity pays X at the end of each year while Jackson is alive. The estimated probability of Jackson surviving for the next 5 years is stated in table 1. The yield rate is assumed to be j1 = 3.2% p.a. Calculate X value. Round your answers to three decimal places. Draw a detailed contingent cash flow diagram for instrument D, from the perspective of Jackson.