00:01
Hello students, to calculate the expected present value that is epb of the benefit for the with profit whole life insurance policy, we need to consider the compound revisionary bonuses and the interest rate.
00:17
So first we need to calculate the present value of basic sum insured.
00:22
So, pb basic equal to sum insured by 1 plus interest rate to the power t.
00:33
So, here we have sum insured is 1 lakh by 1 plus 0 .005 to the power 0 that is 1 plus 1 .05 to the power 0 is equal to 1.
00:53
So, it is 1 lakh dollar.
00:59
Now, we need to calculate the present value of the compound revisionary bonuses that is pb bonuses.
01:08
It is sum of bonuses bonus t by 1 plus interest rate to the power t.
01:16
So, where sum denotes the sum from t equal to 1 to infinity.
01:21
So, here we need to first find here we know bonus by sum of bonus t by 1 plus interest rate whole to the power t.
01:38
Now, we need to find find bonus t.
01:42
So, bonus t equal to sum insured into bonus rate that is 3 percent bonus rate here is 3 percent...