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Actuarial Life and Death: How to write a spreadsheet to calculate APVs based on an inputted life
table

The sheet does not use any commutation functions, recursion formulae or approximations, it
calculates exactly.

It is a thirteen column sheet (columns A to M), with the first three columns (columns A to C)
accommodating the input of the values for x, n and v respectively, columns D and E accommodating
the input of the life table, and the last five columns (columns I to M) displaying the five calculated
APVs, namely;

APV1

APV of an n-year temporary immediate life annuity, with a discount factor of v, of 1 per
year payable once a year for (x)

APV2

APV of an n-year temporary life annuity due, with a discount factor of v, of 1 per year
payable once a year for (x)

APV3

APV of an endowment insurance, with a discount factor of v, of 1, where the death

benefit is payable at the end of the year of death for (x), provided this occurs within n
years

APV4

APV of a death benefit, with a discount factor of v, of 1 payable at the end of the year of
death for (x), provided this occurs within n years

APV5

APV of a pure endowment, with a discount factor of v, of 1 payable after n years as long
as (x) is still alive then
HOW TO WRITE THE SHEET

COLUMNS A TO C

Put the headings x, n and v into cells A1, B1 and C1 respectively, and then input the values for x, n
and v into cells A2, B2 and C2 respectively.

COLUMN D

Put the heading, x values, into cell D1, and then input the x values, in ascending order, down column
D, starting by inputting the lowest x value into cell D2

COLUMN E

Put the heading, lx values, into cell E1, and then input the lx values, in descending order, down
column E, starting by inputting the highest lx value into cell E2
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COLUMN F

Put the heading, r, into cell F1, then put the value, 0, into cell F2, then input the formulae, =F2+1 into
cell F3 and then copy this formula down to, and including, cell F300

COLUMN G

Put the heading, v^rl(x+r) list for APV1 calc, into cell G1, then input the formula,
=IF(AND(F2>0,F2<$B$2+1),$C$2^F2*LOOKUP($A$2+F2,$D$2:$D$300,$E$2:$E$300),0) into cell G2
and then copy this formula down to, and including, cell G300

COLUMN H

Put the heading, v^rl(x+r) list for APV2 calc, into cell H1, then input the formula,
=IF(F2<$B$2,$C$2^F2*LOOKUP($A$2+F2,$D$2:$D$300,$E$2:$E$300),0) into cell H2 and then copy
this formula down to, and including, cell H300

COLUMN I

Put the heading, APV1, into cell I1 and then input the formula,
=SUM(G2:G300)/LOOKUP(A2,D2:D300,E2:E300) into cell I2

COLUMN J

Put the heading, APV2, into cell J1 and then input the formula,
=SUM(H2:H300)/LOOKUP(A2,D2:D300,E2:E300) into cell J2

COLUMN K

Put the heading, APV3, into cell K1 and then input the formula, =1-(1-C2)*J2 into cell K2

COLUMN L

Put the heading, APV4, into cell L1 and then input the formula, =K2-
C2^B2*LOOKUP(A2+B2,D2:D300,E2:E300)/LOOKUP(A2,D2:D300,E2:E300) into cell L2

COLUMN M

Put the heading, APV5, into cell M1 and then input the formula, =K2-L2 into cell M2

You now have a spreadsheet to calculate APVs based on inputted values for x, n and v and an
inputted life table!

An additional note (optional read)

To utilise your spreadsheet to calculate and display the five APVs for x=z,z+1,…h, follow
the four steps below;

STEP 1
Input the values for n and v, as well as the life table, but don’t put in a value for x

STEP 2
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Now put the value for z into cell A3, then input the formula, =A3+1 into cell A4 and then copy
this formula down to, and including, the column A cell in which the value for h appears,
noting this row number.

STEP 3

Now enter the following Visual Basic code into Excel’s Visual Basic facility, replacing R
with the row number of the row in which the value for h appeared;

Sub Macro1()

'

' Macro1 Macro

'

'

For i = 3 To R

Range("A" & i).Select

Selection.Copy

Range("A2").Select

Selection.PasteSpecial Paste:=xlPasteValues, Operation:=xlNone, SkipBlanks _

:=False, Transpose:=False

Range("I2:M2").Select

Application.CutCopyMode = False

Selection.Copy

Range("I" & i & ":M" & i).Select

Selection.PasteSpecial Paste:=xlPasteValues, Operation:=xlNone, SkipBlanks _

:=False, Transpose:=False

Next i

End Sub

STEP 4

Now run this Visual Basic code.

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The column I, J, K, L and M cells in row 3 down to, and including, the row in which the
value for h appeared, now show the five APVs for x=z,z+1,…h

NOTE: If you now want the spreadsheet to calculate and display the five APVs, using the
same life table and the same values for z and h as before, but using a different value(s) for
n and/or v, then simply; delete what’s in the column I, J, K, L and M cells in row 3
downwards, then delete what’s in cell A2, then make your change(s) to the value(s) for n
and/or v and then run the existing Visual Basic code again.

There you have it!

Richard Purvey March 2024