5% Surrender Fee Example
Contents
The client must pay a 5% surrender fee, but they can move the money to an account with a 4.5% rate of return. They have 20 years until the money will be needed. Should the client move their funds?
Data Entry
Prompt |
Value |
||
# of Years |
20 |
||
# of Deposits/Year |
0 |
||
Amount of Deposit |
0.00 |
||
|
Account 1 |
Account 2 |
|
Name |
Current |
Proposed |
|
Initial Value |
$100,000 |
$95,000 |
|
Interest Rate |
3% |
4.5% |
|
Bonus Type |
No Bonus |
No Bonus |
|
Bonus Value |
N/A |
N/A |
|
Term of Bonus |
N/A |
N/A |
|
Annual $ Fee |
0 |
0 |
|
Annual % Fee |
0 |
0 |
|
% Surrender Fee |
5% |
|
|
$ Surrender Fee |
0 |
|
|
Calculations
The Proposed account's value will exceed the Current account value in year 6, and in 20 years will be $26,647 ahead.
