Joe Nautilus has $210,000 and wants to retire. What approximate return must his money earn so he may receive annual benefits of $30,000 for the next 10 years?

A) Greater than 10%
B) Between 8% and 10%
C) Between 6% and 8%
D) Lower than 6%


C) Between 6% and 8%
PVIFA = PVA (App. D: 10 periods)/A
= $210,000/$30,000 = 7.0; Return = between 6% and 8%

Business

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