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Assumed Interest Rate

   Also found in: Dictionary/thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia 0.01 sec.
Assumed interest rate
Rate of interest used by an insurance company to calculate the payout on an annuity contract.

Assumed Interest Rate
In annuities, a component of how monthly payments to the annuitant are determined. It is the minimum interest rate that the annuity may accrue while the annuitant makes payments on it; the annuity may perform better than the assumed interest rate depending on how it is invested, but the assumed interest rate serves as a bottom for how much the annuitant will receive when he/she begins to draw payments.


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Therefore a lower bound is picked for R, under which it is assumed interest rates will not fall.
The prospects of closing the output gap in the medium term must therefore be assessed in the light of the effect that assumed interest rate movements abroad and in Norway have on the exchange rate.
We fixed the problem by making the assumed interest rate an input variable, but we couldn't undo the damage already done.
 
 
 
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