Answer:
The correct answer is 5%.
Explanation:
According to the scenario, the given data are as follows:
Annual withdrawal = $1,000,000
Annual withdrawal = $50,000
So, we can calculate the interest rate by using following formula:
Interest rate = Annual withdrawal ÷ Annual withdrawal
by putting the value in the formula, we get
Interest Rate = $50,000 ÷ $1,000,000
= 0.05
Or 5%
Hence, the Interest rate should be 5%.
