Now that all of you have me obsessed with making sure I have this right and comparing apples to apples...let's begin with the constants:Assets: $199,000Estimated Annual Growth: 6%Term: 7 years (until they start withdrawing)Fees: 2.34% (the actual fees of the annuity)American Express results:Total Fees: $38,421.95Foregone Earnings: $7,281.09Total Fees and Foregone earnings: $45,703.04Total Assets after 7 years subtracting fees: $253,519.39Vanguard results (.3% fees)Total Fees: $4,837.59Foregone Earnings: $889.12Total Fees and Foregone earnings: $5,726.70Forgone earnings on $16,000 surrender charge: $24,058Total Assets after 7 years subtracting fees: $269,437.63Now the following is the calculation for standard Present Value: FV PV = ------------- n (1 + r)Now if I understand the NPV correctly it would equate to the PV-I where I respresents the Initial Investment...NPV for the Vanguard is $183,000...got it.NPV for Amex more complex as it is in the annuity. Here's where I'm struggling...If I understand correctly using numbers from above, the FV of the Amex example is $253,519, So using the above equation...PV = $168,604Meaning in order to get $253,519 in 7 years at 6% interest, I should be starting off with no more that $168,604...but...NPV = PV - INPV = $168,604 - $199,000NPV = -$30,395Since NPV is a negative number, meaning with this investment I'm starting with $199,000 or $30k more than I should I should pull out...have I got this right now? Whew...
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