Question 1
a) W joined the staff pension scheme on 1st January 2008, the total monthly remittances (his and employer’s) to the scheme at the end of each of the last 12 months is Ksh 6,000. The fund manager has declared a rate of interest of 15%, compounded monthly for the year 2008. Determine the total amount to the credit of W  account as at 31st December 2008.
(10 marks)

b) A bond of Ksh 150,000 redeemable in 15 years at 105 pays 4% coupon. What is the purchase price to pay 6%. Show the accumulation of discount by schedule. (10 marks)
c)Using the English Life Table No.12 for Males, find the Probability of a person aged 40;

i) Surviving to age 50 (2 marks)

ii) Dying before age 50(4 marks)

iii) Dying between the ages of 60 and 80 (4 marks)
Question 2
a) A wishes to borrow Ksh 10,000 for two years and to repay the loan plus interest at the end of the two years. Bank A charges interest on loans weekly at the nominal rate of 11% per annum. Bank B charges interest for the first six months with an annual effective rate of 3% and for the remaining period with an annual effective rate of 15%. In each case calculate the amount payable at the end of the two year period. Which bank should Agnes choose for the loan? (10 marks

b) E on retirement from a provident fund retains Ksh 600,000 and in addition purchases an annuity that pays 144 monthly payments of Ksh 12,000 each, the first due at the end of 5 years. If interest accrues at 12%. Compute the total amount received from the provident fund.
(10 marks)

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