Which of the following problems can be solved using the present value of a lump sum formula introduced in this class?

a$.$

Pascal opens and deposits $$10,000$ today in a registered retirement savings plan $($RRSP$)$ that pays $5\%$ per annum compounded monthly. He wishes to know how much the account will be worth in $20$ years if he makes no further deposits.

b$.$

Gary takes a loan that accrues at $5\mathrm{.}5\%$ interest, compounded quarterly. He wishes to know how much he will owe at the end of $3$ years.

c$.$

Chris is setting up a college fund for her niece. He wants her to have $$30,000$ in $10$ years. The college savings fund earns interest at a nominal rate of $4\mathrm{.}5\%$ convertible semi$-$annually. He wishes to know how much he should deposit in the fund today.

d$.$

Scottie purchases a $10-$year certificate of deposit $($CD$)$ that pays $8\mathrm{.}8\%$ per annum compounded quarterly. He wishes to know how much he will have when the CD matures.

e$.$

Fred puts $ $23,000$ into a money market fund. The fund will earn interest at the rate of $2\mathrm{.}2\%$ per year, compounded semi$-$annually. He wishes to know how much the fund will be worth at the end of $5$ years.

Clear my choice

Question $6$