Financial Mathematics

Write short notes on the following:

a) Theory of credibility

b) Concepts of Life table

c) Deferred Annuity

d) Discount

e) Nominal and Effective Rates of Interest

b) A machine depreciate each year by 10% of its value at the beginning of the year. At the end of 4th year, its value of Rs. 131220/-. Find its original value. 

a) What time will be required for a sum of money to doubt itself at 5% simple interest? 

b) Find the rate of interest, if the sum of money will double itself, in 10 years by inverting at compound interest. 

a) Find the effective rate equivalent to the normal rate of interest 6% compound continuously

Find the amount of an annuity due of Rs. 850/- payable at the beginning of each year for 9 year, interest being calculated at a rate of 7% per year compounded annually.

b) A loan of Rs. 3000 is to be repaid with interest ar 6% effective by means of an immediate annuity for 10 years. What will be the interest and principle contained in the 5^th installment? 

A company establishes a sinking fund to provide for the payment of Rs. 20000/- debt maturing in 8 years and contributes a certain sum of money towards the sinking fund at the end of each quarter. Find the quarterly deposit if the rate of interest is 8% compounded semi-annually. 

Explain the elements of a complete mortality table?

A select mortality table (period of selection 2 years), is given below:

The following particulars are given by

Calculate the Net Single Premium for a temporary assurance of Rs: 50000/- for 5 years for a person aged 30, assuming that

a) the insurer earns interest at a rate of 5% per annum .

b) The insurer earns no interest.

From the following mortality table, calculate the-Net Level Premium for a 5-year pure endowment assurance for a person aged 23, assuming 6% rate of interest and Rs. 1000 policy amount on each policy.