# Evaluating Annuity Due etc at an adjusted interest rate

+1 vote
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edited Aug 4, 2016

Hi All

For question 6.8 and 6.9 in DHW 2nd Edition, the interest rate for the annuity and whole life factors have to be changed since the Sum assured / annuity payments are inflated for as long as life $$x$$ is alive. Are we required to calculate this by hand since the standard tables can  no longer be used? If so, how?

commented Aug 4, 2016 by (4,220 points)

I added the question - hope it's the right one!

commented Aug 4, 2016 by (150 points)

Hi Simon

Many thanks those are the correct questions :)

answered Aug 4, 2016 by (1,350 points)

Often in the textbook questions, where there is a change in the interest rate, you will have to use either R or Excel to change the interest rate assumption and obtain the new annuity and/or assurance values.

You will not be expected to calculate these values manually for such long terms. If, however, it was a short term annuity, e.g. 3-5 years, then maybe you will have to do it manually - which is not too difficult nor tedious.