The formula to calculate the Actuarial Premium is:
\[ P = \frac{S \cdot R}{100} \]
Where:
An actuarial premium is the amount of money that an insurance company charges for providing coverage under a policy. This premium is calculated based on various factors including the sum assured, the rate, and the risk associated with the insured entity. The premium is designed to cover the expected costs of claims, administrative expenses, and provide a profit margin for the insurer. Actuarial science uses mathematical and statistical methods to assess risk and determine the appropriate premium to charge.
Let's assume the following values:
Using the formula to calculate the Actuarial Premium:
\[ P = \frac{100000 \cdot 5}{100} = 5000 \]
The Actuarial Premium (P) is $5000.
