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I am taking a course in basic life insurance, and we use this book. If you look at the bottom of page 40, they have this term called a pure endowment insurance, where it states that its present value at time 0 is:

$$PV^{e;n}=e^{-rn}I_n,$$

I really have a hard time understanding both the concept and notation, however, mostly the notation.

What does the ";" mean in the exponent? What does the P in front of V mean? (I first thought that "P" was for present value, however, V is the present value)

Hope someone can give a good explanation as I'm really struggling with this concept.

Frederik
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  • Thank you @saulspatz. So this means actually: a payment of one unit in $n$-years with rate $r$, given the person is still alive ($I_n$)? – Frederik May 12 '19 at 07:05
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    Yes, that's correct. The statement in my previous comment wasn't quite right, and I've deleted it. Your book talks about endowment insurance policies, that are a combination of a term insurance and pure endowment, but as far as I know, these have disappeared. – saulspatz May 12 '19 at 12:13

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