# A $255,000 amount from an RRSP is used to purchase an annuity paying $6000 at the end

## Question:

a. What will be the amount of the final payment?

b. What will be the interest portion of the twenty-seventh payment?

c. What will be the principal portion of the fifty-third payment?

d. How much will the principal balance be reduced by Payments 14 to 20 inclusive?

e. How much interest will be received in the sixth year?

Annuity

An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...

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