A life office issues a 3-year without-profit endowment assurance policy to a man aged 62. The sum assured of £3,000 is payable on maturity or at the end of the policy year of death with level annual premiums of £945 payable throughout the term of the policy. The life office incurs initial expenses of £40 in putting the policy on its books, renewal expenses of £10 at the beginning of each subsequent policy year and £50 on the payment of the sum assured. It is assumed that interest will be earned at 6% per annum and mortality will be in accordance with A1967-70 (ultimate mortality). Reserves are calculated on a net premium method using a rate of interest of 3% per annum and mortality in accordance with A1967-70 (ultimate mortality). Assuming that no surrenders or lapses occur, calculate using a profit testing analysis: (i) the profit made at the end of each of the three years provided the policy is in force at the beginning of the year, (9 marks) (ii) the net present value of the profit on the policy at the outset assuming a risk discount rate of 8% per annum, (6 marks) (iii) the profit margin using a rate of interest of 6% per annum. (5 marks)