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Bernice Is About to Retire with $139,000 in Her RRSP

Question 207

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Bernice is about to retire with $139,000 in her RRSP. She will make no further contributions to the plan, but will allow it to accumulate earnings for another six years. Then she will purchase an annuity providing payments of $5,000 at the end of each quarter. Assume that the RRSP will earn 8.5% compounded annually and the funds invested in the annuity will earn 7.5% compounded monthly. How long after the purchase of the annuity will its payments continue?

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