A $255,000 amount from an RRSP is used to purchase an annuity paying $6,000 at the end of each quarter. The annuity provides an annually compounded rate of return of 6%.
a) What will be the amount of the final payment?
b) What will be the interest portion of the 27^th payment?
c) What will be the principal portion of the 53^rd payment?
d) How much will the principal balance be reduced by Payments 14 to 20 inclusive?
e) How much interest will be paid by the payments received in the 6^th year?

Question

Quizplus · Accepted Answer

The Answer of A $255,000 amount from an RRSP is used to purchase an annuity paying $6,000 at the end of each quarter. The annuity provides an annually compounded rate of return of 6%. a) What will be the amount of the final payment? b) What will be the interest portion of the 27^th payment? c) What will be the principal portion of the 53^rd payment? d) How much will the principal balance be reduced by Payments 14 to 20 inclusive? e) How much interest will be paid by the payments received in the 6^th year?

A $255,000 Amount from an RRSP Is Used to Purchase