Question 1

Monty expects to contribute $300 at the end of every month to his RRSP for the next five years. For the subsequent 10 years, he plans to contribute $2,000 at the end of each calendar quarter. How much will be in his RRSP at the end of the 15 years if the funds earn 8% compounded semi-annually?

Accepted Answer

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Question 2

An investment consists of deposits of $500 per quarter for 10 years. How much will be in the account after 10 years if interest is 5.5% compounded semi-annually?

Accepted Answer

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Question 3

Joshua wants to structure a 20-year annuity so that its end-of-quarter payments are $2,000 for the first 10 years and $2,500 for the next 10 years. Pacific Life Insurance Co. offers to sell this annuity with a 4.8% compounded monthly rate of return to the annuitant. What amount must Joshua pay to Pacific for the annuity?

Accepted Answer

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Question 4

An investment plan requires year-end contributions of $1,000 for 25 years.
What will be the future value of the plan if it earns 7½% compounded monthly for the first 10 years and 8% compounded semi-annually thereafter?

Accepted Answer

The answer of An investment plan requires year-end contributions of...

Question 5

Cliff has a business bank loan in which he makes quarterly payments of $2821.40. The loan is for five years, at 4.75% compounded semi-annually. What was the amount of the loan? What amount of interest will Cliff pay on his loan?

Accepted Answer

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Question 6

Sam is saving $100 per month. How much will he have in his account at the end of five years if his account earns 3.8% compounded quarterly?

Accepted Answer

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Question 7

A preferred share pays a dividend of $3.25 per quarter until it is redeemed, at which time the value of the share is $60. What is the fair market value of the share if the redemption date is in 10 years, and shares of this type are currently generating a rate of return of 8% compounded semi-annually?

Accepted Answer

The answer of A preferred share pays a dividend of...

Question 8

What is the value of a contract that will pay $500 at the end of each month for 2 years and $2,000 at the end of each quarter for the subsequent 3 years? Use a discount rate of 6% compounded semi-annually.

Accepted Answer

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Question 9

Kristina is saving $150 every two weeks into an account that earns 3.75% compounded quarterly. How much will she have in the account after five years? What amount of interest will Kristina earn from this account?

Accepted Answer

The answer of Kristina is saving $150 every two weeks...

Question 10

What will be the amount in an RRSP after 25 years if contributions of $3,000 are made at each year-end for the first seven years and month-end contributions of $500 are made for the subsequent 18 years? Assume that the plan earns 8% compounded quarterly for the first 12 years and 7% compounded semi-annually for the next subsequent years.

Accepted Answer

The answer of What will be the amount in an...

Question 11

Jane is paying $506 per month for a car over five years. She had a down payment of $6,000, and is paying interest at 4.8% compounded quarterly. What was the purchase price of the car? How much interest will Jane pay overall?

Accepted Answer

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Question 12

Jane is making monthly payments of $450 for four years for a car at an interest rate of 5.5% compounded semi-annually. What was the purchase price of the car?

Accepted Answer

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Quiz 10: Annuities: Future Value and Present Value