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Assumed Interest Rate |
Also found in: Acronyms | 0.01 sec. |
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Assumed interest rate 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. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| We fixed the problem by making the assumed interest rate an input variable, but we couldn't undo the damage already done. For each participant, obtain a "present value factor" (PV factor) equal to the participant's current compensation multiplied by 1/ {1 + i} to the "nth" power, in which "i" is an assumed interest rate {not less than 7. The substitute LOC covers the principal amount of bonds, $20,000,000 and interest representing 55 days of interest at a maximum assumed interest rate of 12% per annum based on a 360-day year. |
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