The client has a $100,000 account with monthly deposits of $250, and earning a 3% fixed rate of return. To roll the money out will require they pay a 5% surrender fee, but the new account will earn 3.5% and pays a 3% Interest Bonus. They have 10 years until the money will be needed. Should the client move their funds?
Data Entry
Prompt |
Value |
||
# of Years |
10 |
||
# of Deposits/Year |
12 |
||
Amount of Deposit |
250 |
||
Account 1 |
Account 2 |
||
Name |
Current |
Proposed |
|
Initial Value |
$100,000 |
$95,000 |
|
Interest Rate |
3% |
3.5% |
|
Bonus Type |
No Bonus |
Interest |
|
Bonus Value |
N/A |
3% |
|
Term of Bonus |
N/A |
3 |
|
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 2, and in 10 years will be $4,471 ahead.
