Hi :) At age 55 member's salary rate is 85000. To calculate the salary rate at age 56, don't we multiply by $$\frac{\bar{s}_{56}}{\bar{s}_{55}}$$ The DHW solutions use $$\frac{s_{56}}{\bar{s}_{55}}$$ and I don't understand why.

Please help.

Login

0 votes

Best answer

Hi Shuri

You are correct that in order to calculate the annual rate of salary at age 56 exact you would use the ratio of the annual rate of salary as you have given. The reason DHW uses the salary scale instead is because the rate of salary function is not given so the salary scale is used as an approximation.

- All categories
- BUS 1003H - Introduction to Financial Risk (49)
- BUS 2016H - Financial Mathematics (53)
- BUS 3018F - Models (70)
- BUS 3024S - Contingencies (61)
- BUS 4028F - Financial Economics (25)
- BUS 4027W - Actuarial Risk Management (48)
- BUS 4029H - Research Project (5)
- Mphil (1)
- Calculus and Pure Mathematics (4)
- Statistics (16)

...