yr 1 yr 2 yr 3 Calculate the interest and maturity due at the end of each of three years compounding the interest yearly. The original principal is $133,000 and the annual interest rate is 11%. Show your work. Your answer should be equal to 181,895. Show your work. Beginning of the year investment Times the Annual Interest Rate 133,000 (1+.11)1 147,630 (1+.11)2 181,985 Annual Interest earned that year 14,630 34,355 Ending Principal and Interest 147630 *** note that ending balance is next years beginning investment 181,985 181,985 Insurance agents package a surrender value along with life insurance and call it "Whole Life." It is very deceptive. You are told that putting just $100 per month away for 25 years, your surrender value will be $50,000!! Sounds good. In fact, you will have contributed only $30,000 (100*12*25). So, you think this is too good to be true. But, understanding time valu of money you want to look closer. So, calculate this same deal without the insurance premium built in and tell me what your investment would be. Calculate this 3 ways. Consider that we put in $100 12 times a year or $1,200. If we can earn 6% on this over time, what will it be worth?. Do the same math but do 8% instead. Do the same math for 8% over 30 years. 6% for 25 8% for 25 8% for 30