### Question
Can you define what applicable Federal interest rate means?


### Answer
**Applicable Federal interest rate** is defined as the following in *26 U.S.C. § 807*:

> the annual rate determined by the Secretary under section 846(c)(2) for the calendar year in which the contract was issued

#### Citation:
  - *26 U.S.C. § 807*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter L-Insurance Companies > PART I-LIFE INSURANCE COMPANIES > Subpart C-Life Insurance Deductions**

