1. [2010 paper question 6] The deterministic force of interest at time t is
given by
0.01 t 5 (t) = . 0.03 t > 5 Find the present value of a 10 year continuous annuity that pays 1 per annum during the first 3 years and 2 per annum during the last 7 years. Calculate also its accumulated value after 10 years. 2. [2012 paper question 3] The force of interest at time t is given by 1 . (t) = 10 + t An increasing annuity pays an amount of 11 at the end of the year 1, 12 at the end of year 2 and so on till final payment which is 20 at the end of year 10. Calculate the present value of the annuity at time 0 and the accumulation of the annuity at time 10. 3. [2007 paper question 2] The force of interest is given by
0.08 0 t < 1 . (t) = 1 1t<3 1+t (a) Find the present value for a 3-year increasing annuity paid continuously with a stream of payments as follows:
1 0t<1 2 1t<2 . (t) =
3 2t<3 (b) Find the accumulated value after 3 years of the annuity described in the previous part.