the data processing system for administering the program comprises a central computer connected to a network of remote point - of - sale stations . in overview , the system operates as follows . the point - of - sale stations serve as the data entry point for customer transactions , including insurance unit purchases , payouts , and redemptions . the point - of - sale stations also serve as an access point by which the salesman can refer to and retrieve data to answer a customer &# 39 ; s questions concerning the insurance program to determine the charge to the customer for insurance unit purchases , and to determine the amount to be paid to the customer for insurance unit redemptions and payouts . in addition , the point - of - sale stations store a record of customer transactions which is periodically transmitted to the central office computer . the central office computer receives and processes the customer transaction data from the multiple point - of - sale stations . based on the customer transaction data , the data processing system which operates on the central computer updates the account list and the master file of account data . the central system also provides information to the manager of the investment fund for the program concerning the current purchases , payouts , and redemptions and projected purchases , payouts , and redemptions . the system also provides the investment manager information about how the particular investments available match the projected cash flow requirements of the fund . the central system creates a report to the investment manager summarizing customer transactions and investment transactions , and an analysis of the projected cash flow needs of the fund compared to the projected income and maturity dates of the fund &# 39 ; s investments . in addition , the system creates periodic reports for the customers concerning the current value of their units and the income generated by the program . with the foregoing overview in mind , the detailed operation of the system can best be understood by referring to fig1 - 3 which illustrate the system in the context of an insurance investment program for funding the cost of a future college education . although funding future college education costs is the particular embodiment shown and described herein , it will be apparent to those skilled in the art how the invention can be adapted , within the scope of the invention , to insurance investment programs for funding other future liabilities of uncertain cost . as shown in fig1 the customer transaction operations performed at the point - of - sale stations include blocks 11 - 14 . customer transactions can be purchases , payouts , or redemptions of fund units . unit purchase data is entered at block 11 , unit payout data is entered at block 12 , and unit redemption data is entered at block 13 . each entry includes the customer &# 39 ; s name and account number and the transaction amount . the entered transaction data is stored at block 14 for transmission to the central processing facility . the transaction data accumulated at the point - of - sale stations is transmitted periodically ( e . g ., daily ) to the central processing facility . alternatively , the data can be transmitted immediately upon entry and accumulated for processing at the central facility . the data for each incoming transaction is processed individually in a loop beginning with block 15 and ending at block 25 where all transactions in a batch ( e . g ., a day ) are totalled prior to further processing as a group in accordance with block 26 et seq . the incoming transaction data is first subjected to test 15 which determines whether the transaction is a purchase ( no output ) or a redemption ( yes output ). if the transaction is a purchase , the system flow passes to test 21 which determines if the purchase is the first transaction in a new account or an additional transaction in an existing account . for new accounts the system flow passes to block 22 which creates a new entry in the account list based on the transaction data . transaction data for both new and existing accounts then passes to block 23 which checks the transaction data for possible errors in calculation at the point - of - sale station . if the transaction is a payout or a withdrawal , data flow moves from test 15 to block 16 where the transaction data is verified to confirm that it is from a valid account . the account information necessary to verify the transaction data is supplied from the account list stored in the system &# 39 ; s master file , shown at block 17 . thereafter , the data flow passes to test 18 , which determines whether the transaction is a payout ( withdrawal at maturity ) or a redemption ( withdrawal before maturity ). payout transaction data passes to verification block 23 . for redemption transactions , the redemption before maturity penalty ( rbmp ) must be calculated . this is accomplished at block 19 . the rbmp calculation is based on the current value of an insurance unit which is a function of the present college cost data . the college cost data is supplied from one of the system &# 39 ; s data files shown at block 20 . from the rbmp calculation , system flow for redemption transactions also passes to verification block 23 which checks for possible errors made at the point - of - sale station . from verification block 23 , system flow passes to block 24 , where each transaction is recorded in the system &# 39 ; s master file , and the customer account list data is updated . thereafter , system flow passes to block 25 , where purchase , payout , and redemption transactions are totalled . next , system flow passes to block 26 , where the current spread calculation is carried out to create an updated schedule of the current charge to customers for insurance units based on the prevailing college cost and inflation rate data . the current spread calculation is explained in greater detail below in relation to fig2 . the updated schedule of current charges is transmitted to the point - of - sale stations . there , the schedule is used by the salesmen to provide cost information to customers and to set the cost for unit purchases , unit payouts , and unit redemptions . system flow then proceeds to block 27 which carries out the update asset position operation to determine what investment transactions should be made in the fund investment portfolio based on current and projected customer transactions . the update asset position operation is explained in greater detail below in relation to fig3 . the data processing system advises the fund manager of its determination concerning the net amount of required investment transactions and provides a list of the investments which might be suitable for purchase or sale . based on this information , the manager can choose the investment transactions to be made and enter the investment transaction data into the system . after the investment transaction data is entered , system flow passes to block 28 , where a report is created for the investment manager which details the changes made during the period , including the transaction totals for the period , the fund assets purchased and sold , the projection of the cash flow requirements for customer transactions , the projection of the cash flow generated from the fund assets , etc . next , system flow passes to block 29 , where the system periodically ( e . g ., annually ) prepares a tax liability statement for each customer and for the fund manager . also , at block 30 , the system prepares another periodic report ( e . g ., quarterly ) to provide the customer with current account information . referring now to fig2 there is shown a more detailed flow chart for the current spread calculation process corresponding to block 26 of fig1 . the current spread calculation creates a schedule of the current charge to customers for insurance units of various maturity dates . the calculation proceeds on the basis of information concerning current college costs , the current inflation rate and the projections for change of the inflation rate , and the risk premium which compensates the fund for assuming the investment risk . the process starts at block 34 with an evaluation of several variables which contribute to the increase in college costs . data concerning the current inflation rate ( block 33 ) and the expected changes in the inflation rate ( block 32 ) are entered into the system by the fund manager . data concerning current college costs and the rate of increase of college costs ( e . g ., in the united states of america , u . s . department of education college cost forecasts ) is entered into the system ( block 31 ). the system quantifies and combines this data ( block 34 ) and calculates a future value escalation rate ( fver ) for each maturity offered ( block 35 ) and to fix current college costs ( ccc ). flow then passes to block 36 , which calculates the future college cost at each maturity ( fc m ) by escalating the current college cost ( ccc ) at the fver rate according to the relation fc m = ccc ( 1 + fver m ) n , where n is the number of years to maturity . this future value is then discounted at a rate , the present value discount rate ( pvdr ), which represents the estimated inflation rate ( fver ) minus the insurer &# 39 ; s risk premium ( irp ). the insurer &# 39 ; s risk premium rate is entered by the fund manager ( block 37 ) and can be adjusted to compensate for market volatility or other factors which affect the investment risk involved . the calculation of the pvdr is accomplished at block 38 . then , at block 39 , the future cost for each maturity is discounted to the present value using the pvdr to determine the current price per insurance unit for each maturity ( cp m ) according to the relation cp m = fc m ( 1 + pvdr m ) - n , where n is the number of years to maturity . finally , the cp m values are assembled into a current cost schedule at block 40 and the current cost schedule is transmitted to the point of sale stations . at this point the current spread calculation is completed and control is then transferred to the update asset function corresponding to block 27 in fig1 which will now be discussed in more detail . referring now to fig3 there is shown a more detailed schematic flow chart for the update asset position function ( block 27 ). this operation enables the fund manager to evaluate changes in the fund investment portfolio to invest net income , to meet redemption and payout obligations , and to structure the investment portfolio to provide for funding future obligations while maximizing return on the portfolio . first , the net change in the fund &# 39 ; s asset position is determined at block 43 . this determination is made by combining the totalled customer transaction data ( generated at block 25 ), actuarial data ( block 41 ), and reinvestment cash flow data ( block 42 ). the actuarial data is entered into the system by the fund manager based on information concerning the projected rate of increase of college costs , basic economic data which affect those costs , and the redemption rate of insurance units . the reinvestment cash flow data is generated by the system and includes income realized from the fund &# 39 ; s investments , e . g ., dividends or bond coupon payments , plus the principal amounts realized from securities which matured or were sold during the period . the result of the net change in asset position data is sent to block 46 for selection of the investments to be purchased or sold . also provided at block 46 is data concerning projected interest rate levels ( block 44 ), investment criteria entered by the fund manager and data from the system &# 39 ; s data base concerning the range of securities available for purchase or sale ( block 45 ). the system selects a list of securities which meet these various criteria and displays the options to the fund manager . the fund manager enters his selection of investment transactions into the system . thereafter , flow passes to two tests which evaluate the changed fund portfolio . first , test 47 determines whether the yield on the new portfolio exceeds fver , i . e ., whether the rate of return on investments is enough to match the expected rate of increase in liabilities . second , test 48 determines whether the cash inflow from the new portfolio exceeds the projected liabilities , i . e ., whether the return of interest and principal from maturing securities matches the fund liabilities due to payouts on maturing insurance units and expected redemption before maturity of insurance units . only if the fund manager &# 39 ; s selections pass both tests are the investment transactions carried out . otherwise , control returns to the portfolio selection step ( block 46 ) via block 45 at which the problems with the selected transactions are displayed to the fund manager so that he can revise his criteria and make a new selection of investments . the selection / evaluation loop ( 46 , 47 , 48 , 45 ) continues until the fund manager is satisfied that the return on the portfolio is maximized and the portfolio meets the tests imposed by the system . then , flow passes to test 49 to determine whether the selected transactions are purchases or sales and to blocks 50 and 51 to effect orders for purchase or sale of the selected securities . at block 52 , a report of the securities purchased or sold is generated . at that point , the update asset function is completed and system flow passes to the report generating functions at blocks 28 , 29 , and 30 discussed earlier with reference to fig1 .