# Cynthia currently has $55,000 in her RRSP. She plans to contribute $7000 at the end of each

## Question:

a. Assume that her RRSP earns 8.75% compounded annually for the next 17 years, and the fund from which the annuity is paid will earn 5.4% compounded monthly. What monthly payments will she receive?

b. If the average annual rate of inflation for the next 17 yearsis2 %, what will be the purchasing power in today’s dollars of the monthly payments 17 years from now?

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,...

Fantastic news! We've Found the answer you've been seeking!

## Step by Step Answer:

**Related Book For**