36. Pete invested $50,000 in a variable annuity 15 years ago when he was 52. The contract is now valued at $180,000, and Pete elects to annuitize under a straight life option. The AIR is 5 percent and the annuity purchase rate is $6.50. What is Pete's initial income payment? Ⓒa. $900 b. $1,170 OC $2,500 od. $3,250

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.