rounder
(rounder)

Premiums are paid by month, so it growths at (7%/12 ) per month instead of 7% per year;

Also they are paid at the beginning of the period, so interest starts to accrue a little earlier than the end mode.

I used the FV formula in excel to calculate it and got 290,381 at the end of 40 years.

Interestingly, if you increase the annual return to 8%, after 40 years the investment is worth 384,080.

So if the insurance companies earns 8% instead of 7%, they will be doing quite well.

Also they are paid at the beginning of the period, so interest starts to accrue a little earlier than the end mode.

I used the FV formula in excel to calculate it and got 290,381 at the end of 40 years.

Interestingly, if you increase the annual return to 8%, after 40 years the investment is worth 384,080.

So if the insurance companies earns 8% instead of 7%, they will be doing quite well.

(#302508@0)

2001-12-18 -04:00

2001-12-18 -04:00