Victoria deposits $650 at the end of every half-year for 12 years and 6 months in a

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Question:

Victoria deposits $650 at the end of every half-year for 12 years and 6 months in a retirement fund at 4.52% compounded quarterly.

a. What type of annuity is this?

b. How many payments are there in this annuity?

2. How much should Steven have in a savings account that is earning 3.50% compounded monthly, if she plans to withdraw $1,950 from this account at the end of every month for 5 years?

3. Nathan saved $170 at the end of every month for 3 years in her bank account that earned 4.30% compounded monthly.

a. What is the accumulated value of her savings at the end of the period?

b. What is the interest earned over the period?

4. Calculate the present value of a loan that could be cleared by payments of $3,250 at the end of every 6 months for 6 years if money earns 5.82% compounded semi-annually.

5. Steven purchases a retirement annuity that will pay him $2,500 at the end of every six months for the first ten years and $900 at the end of every month for the next five years. The annuity earns interest at a rate of 3.6% compounded quarterly.

a. What was the purchase price of the annuity?

b. How much interest did Steven receive from the annuity?

6. Gregory deposited $1,200 at the end of every month into an RRSP for 8 years. The interest rate earned was 4.50% compounded semi-annually for the first 4 years and changed to 4.75% compounded monthly for the next 4 years. What was the accumulated value of the RRSP at the end of 8 years?