Suppose a Universal Life policy is expected to be supported by invested assets that earn 7% interest (net of investment expenses and asset defaults), with a credited interest rate 1.5% below the earned rate.

Suppose further that (1) policy loans are charged an interest rate of only 4%, (2) annual policy loan expenses amount to 0.5% of outstanding policy loans, and (3) the portion of the cash value that is loaned is credited with an interest rate of only 3%. Develop a formula for the average interest spread being earned on all assets at the end of policy year t, in terms of PolLoan(t), InvAssets(t), and Assets(t).