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Equations for Insura
For Test
Question | Answer |
---|---|
Mortality Costs | mortality Risk x death benefit |
Residual Disability Benefit | loss of monthly pre-tax income/ prior monthly pretax income) x monthly benefit per total disability |
NAVPS (Net Asset Value per Share) | (total assets - total liabilities) / # of shares outstanding |
Current Yield | annual interest payment / current price of the bond |
Rinf (real return adjusted for inflation) | (Investment return - inflation rate)/(1 + (inflation rate / 100)) |
after tax return ATR | investment return x (1 - MTR / 100) (MTR is marginal tax rate) |
Real, After tax rate of return | (after tax rate of return - inflation rate) / ( 1 + (inflation rate / 100)) |
Proportional reduction method (IVICS) | ((withdrawal amount x 100) / (market Value @ time of withdrawal)) x 100. |
Linear Reduction Method | original guaranteed amount - withdrawl |
Reset Value | Add $ earned every contributed year or if loss use only amount contributed |
Market Value | total assets - total liabilities / # of units outstanding |
Marginal tax rate | (federal income tax rate) + (Provincial income tax rate) |
Taxable Capital Gain | capital gain x 50% |
Policy Gain | cash surrender value - adjusted cost basis |
RRSP contribution room | (current contribution room arising Jan 1st of current year - pension adjustment from previous years) + (carry-forward of unused contribution room from previous years |
Present Value of Lump Sum | PV of lump sum = FV + (1 + i) ^n Pv = present value FV = value of lump sum in the future i= annual interest rate @ which the PV is invested, as decimal n= # of years of investment |
Future Value of a Lump Sum | FV of lump sum = PV x (1 + i)^n FV=value in the future PV = present value of the lump sum i =annual interest rate @ rate which PV is invested, as a decimal n= number of years of investment |
Future Value of Annuity | PMT / i x ((1 + i)^n -1) PMT = annual investment i = the annual interest rate on the investments, as a decimal n = number of years investments are made |
Present Value of Annuity | PMT / i x (1-1 / (1+ i)^n) PMT = annual payment i= the annual interest rate on the investments, as a decimal n = the number of years payments are needed |