Malcolm Wants to Purchase an Annuity That Will Pay Him

Multiple Choice

Malcolm wants to purchase an annuity that will pay him $7,000 at the end of every three months for 15 years. His financial advisor has told Malcolm that this annuity will cost him $250,000. What annually compounded nominal interest rate was used in this calculation?

A) 7.56%
B) 9.3%
C) 12.60%
D) 18.89%
E) 22.67%