Your Insurance Agent Is Trying to Sell You an Annuity

Your insurance agent is trying to sell you an annuity that costs $200,000 today. By buying this annuity, your agent promises that you will receive payments of $1,225 a month for the next 30 years. What is the rate of return on this investment?

A) 5.75 percent
B) 5.97 percent
C) 6.20 percent
D) 6.45 percent
E) 6.67 percent