Annuity Interest Rate What Annual Interest Rate Would You Need

question 79

Multiple Choice

Annuity Interest Rate What annual interest rate would you need to earn if you wanted a $200 per month contribution to grow to $14,700 in five years?

• A)6.47 percent
• B)7.76 percent
• C)8.01 percent
• D)14.70 percent

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Definitions:

Disposable Income

The amount of money an individual or household has to spend or save after income taxes have been deducted.

Gross Monthly Income

The gross amount of earnings received in a month prior to any deductions or taxes being subtracted.

Living Expenses

costs associated with day-to-day life, such as housing, food, and transportation.

Percent Rate

The percentage that indicates the rate at which a certain value, such as interest, increases or decreases.