3. An individual who is aged at 50 has just beeninvolved in an accident. For the first year afterthe accident, the individual's mortality followsthe Standard Ultimate Life Table, with a 8%higher force of mortality. After the first year, theindividual's mortality follows the StandardUltimate Life Table with no other adjustment.The individual is paid a whole life annuity-due of10,000 per year, payable annually. Calculate theEPV of the annuity at an interest rate of 5% peryear.

Perpetuity due is a form of annuity where the annuity amount is received for an infinite period and…

Answered: The individual is paid a whole life…

The individual is paid a whole life annuity-due of 10,000 per year, payable annually. Calculate the EPV of the annuity at an interest rate of 5% per year.

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 40P

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Question

3. An individual who is aged at 50 has just been
involved in an accident. For the first year after
the accident, the individual's mortality follows
the Standard Ultimate Life Table, with a 8%
higher force of mortality. After the first year, the
individual's mortality follows the Standard
Ultimate Life Table with no other adjustment.
The individual is paid a whole life annuity-due of
10,000 per year, payable annually. Calculate the
EPV of the annuity at an interest rate of 5% per
year.

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