Change, in the 5th line of part a): "He stated that in 1967 (not 1977) there were 413 million...."

The correct answers then are:

a: [.296 .091 .613]

b:

    .874 .041     .085

    .268 .732    0

    0        0    1

 c. (have to apply the transition matrix two times):

        [.269 .069 .662]

d. (have to apply the transition matrix one more time)

 Error in #7 sec 5.3

The annuity due in this problem should come to term on November 30, not December 1, meaning that there will be 9 compounding periods. The answer in the back may be wrong.

The answer in the book for #19 in section 5.1 is wrong.

The correct answer is $1039.76.

The answer should be negative.