I would also suggest going with 225/50/16 all around instead of 205/55/16 in front and 225/55/16 in rear, for two additional reasons to those good ones already mentioned by Greg:

1) Having a 225/50 in front will significantly improve braking performance. And V8 Volvos can use better braking than stock 700s.

2) You will be able to rotate front and rear tires, which could be useful if you spin the tires a lot with all that torque.....

Moreover, putting 225/55/16 in the back instead of 225/50/16 will increase ride height and may also rub under heavy cargo load.

As to the wheels, 7 inches is ok for any of those tires. What you may want to recheck is whether the offset is correct.

Andy
86/90 785