July 8th, 2012, 07:20 AM  #61  
Math Team Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,415 Thanks: 1025  Re: How to divide insurance payout fairly Quote:
That works out to an annual rate of ~12.828%. And, IN THIS MANNER, the breakdown is like this: Code: Monsieur A  Monsieur B YR PAID INT. BALANCE PAID INT. BALANCE 1 348 0 348  2 348 45 741  ...  8 348 462 4415  9 0 566 4981  348 0 348 10 0 639 5620  348 45 741 ...  22 0 2720 23920  348 1324 11994 : 23920 + 11994 = 35914 If we remove the $25,000 from the "interest", then we end with $10,914; that works out to an annual rate of ~3.228% The breakdown calculated as above ends with Mr. A = $4,871, Mr. B = $6,043: Mr. B now ahead, and that's due to the lower rate...thus reduced compounding effect. The 25,000 can now be (as example) paid out according to "premiums paid"; thus 8/22 * 25000 = 9091 for Mr. A, so 15909 for the now "smiling" Mr. B. SO Mr. A gets 4871 + 9091 = $13,962 ans Mr. B gets 6043 + 15909 = $21,952; CHECK: 13962 + 21952 = 35,914 .... and VOILA ! Where do I send my invoice?  

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