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.
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