Neco 2025 Commerce Question 10
Practice objective / multiple choice question 10 from the 2025 Neco Commerce examination.
A whole‑life insurance policy promises a death benefit of \(\text{₦}1,000,000\) payable at the end of the year of death. The annual premium is level and payable at the start of each year. Assume the probability of death in year \(t\) (for \(t=1,2,\dots,30\)) is \(q_t = 0.0015 + (t-1)\times0.0002\). The effective annual interest rate is 6%. Determine the level annual premium such that the present value of the premiums equals the present value of the expected death benefits over the 30‑year term. Give your answer in naira rounded to the nearest naira.
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About This Question
This is Neco 2025 Commerce Question 10. It is one of the objective questions from the 2025 Neco Commerce examination.
Difficulty level: Medium .
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