Neco 2023 Commerce Question 44
Practice objective / multiple choice question 44 from the 2023 Neco Commerce examination.
A life‑insurance policy provides a sum assured of ₦5,000,000 payable at death. The annual premium is calculated using the formula \( \text{Premium}= \frac{\text{Sum Assured}\times \text{Mortality Rate}}{1-(1+i)^{-n}} \) where the mortality rate is 0.0005, the policy term \(n\) is 20 years and the insurer uses an effective annual interest rate \(i = 6\%\). Compute the annual premium, rounded to the nearest naira.
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About This Question
This is Neco 2023 Commerce Question 44. It is one of the objective questions from the 2023 Neco Commerce examination.
Difficulty level: Medium .
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