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in BUS 3024S - Contingencies by (1.1k points)

Hi


How did the memo arrive at multiplying (1.04)^0.5 during the calculation of management charges? Could the annuity in arrear function not be used instead? Level premiums are payable monthly in advance for this policy.


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1 Answer

0 votes
by (670 points)
Hi

It does not seem very clear from your screenshots. I don't even see any info on what is 1.04. Maybe premium is charged in the mid of every month? 
by (1.1k points)

Hi. Please see the attached further info. I believe premiums are paid monthly in advance.


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by (2.9k points)
It's difficult to see from your screenshots the whole question plus solution. The memo might have followed a different approach to you are thinking of it. Could you email me the question paper from where you got this? It might provide good insight into the approach to the question that the memo is trying to follow.
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