Question 1

Fraser deposits $790.00 at the beginning of every three months. He wants to build up his account so that he can withdraw $1550.00 every three months starting three months after the last deposit. If he wants to make the withdrawals for 16 years and interest is 6.64% compounded quarterly, for how long must Fraser make the quarterly deposits?

Accepted Answer

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Question 2

How much does a depositor have to save at the beginning of every 6 months for twenty years to accumulate $1 000 000.00 if interest is 6.00% compounded semi-annually?

Accepted Answer

The answer of How much does a depositor have to...

Question 3

Mr. Dawson wants to receive payments of $1230.00 at the beginning of every three months for 19 years starting on the date of his retirement. If he retires in 21 years, how much must he deposit in an account at the beginning of every three months if interest on the account is 6.84% compounded quarterly?

Accepted Answer

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Question 4

A debt of $23 900.00 is repaid by making payments of $3617.00 at the beginning of every six months deferred for three years. If interest is 9.6% compounded monthly, for how long will payments have to be made?

Accepted Answer

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Question 5

Ellora wants to accumulate $150 000.00 in an RRSP by making annual contributions of $5000.00 at the beginning of each year. If interest is 5.5% compounded quarterly, calculate how long she has to make contributions.

Accepted Answer

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Question 6

A debt of $140 000.00 is to be repaid in installments due at the end of each month for 15.5 years. If the payments are deferred for three years and interest is 7.28% compounded quarterly, what is the size of the monthly payments?

Accepted Answer

The answer of A debt of $140 000.00 is to...

Question 7

You start to save for a major purchase. You can invest $500 every three months for 10 years. You are able to earn 8% compounded semi-annually. What is the amount of interest that you earn during the entire term?

Accepted Answer

A) $10 072.94 
B) $20 072.94 
C) $30 072.94 
D) $15 072.94 
E) $25 072.94

Question 8

Amy contributed $1011.00 at the end of every six months for 21.5 years into an RRSP earning interest at 6.65% compounded semi-annually. Seven years after the last contribution, Amy converted the RRSP into an RRIF that is to pay her equal quarterly amounts for 17.25 years. If the first payment is due three months after the conversion into the RRIF and interest on the RRIF is 7.66% compounded quarterly, how much will Amy receive every three months?

Accepted Answer

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Question 9

Abe deposited a sum of money at the end of every month for 15 years at 8.5% compounded monthly. After the last deposit, interest for the account is to be 3.5% compounded quarterly and the account is to be paid out by end-of-quarter quarterly payments of $5905.00 over 17 years. What is the size of the monthly deposit?

Accepted Answer

A) $560 735 
B) $1550 
C) $756 
D) $1160 
E) $1466

Question 10

Cameron is 35 years old and intends to retire at the age of 60. He is planning to contribute $3000 at the beginning of each six-month period to an RRSP. What semi-annually compounded rate of interest must his RRSP earn in order to reach $600 000 after 25 years?

Accepted Answer

A) 9.72% 
B) 9.43% 
C) 4.86% 
D) 4.72% 
E) 9.52%

Question 11

A property was purchased for quarterly payments of $3000.00 for 10 years. If the first payment was made on the date of purchase and interest is 6% compounded annually, what was the purchase price of the property?

Accepted Answer

The answer of A property was purchased for quarterly payments...

Question 12

Gary and Sandra Duncan bought a property by making semi-annual payments of $4210.00 for 8.5 years. If the first payment is due on the date of purchase and interest is 8.53% compounded quarterly, what is the purchase price of the property?

Accepted Answer

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Question 13

What is the principal invested at 6.5% compounded semi-annually from which monthly withdrawals of $840.00 can be made at the beginning of each month for 15.5 years but deferred for 2 years?

Accepted Answer

The answer of What is the principal invested at 6.5%...

Question 14

An annuity provides payments of $4580.00 at the end of every three months. The annuity is bought for $53 500.00 and payments are deferred for 10 years. If interest is 9.72% compounded monthly, for how long will payments be received?

Accepted Answer

The answer of An annuity provides payments of $4580.00 at...

Question 15

Jenna intends to contribute $2500 to her RRSP at the beginning of every six months, starting today. The financial adviser has advised Jenna that if she continues her contributions for 20 years, the RRSP would earn 8% compounded semi-annually for the first 7 years and 7% compounded semi-annually, thereafter. What amount will Jenna have in the plan after 20 years?

Accepted Answer

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Question 16

Witzke retired from Ontario Hydro and received a payment of $980 000.00 at age 56. He invested that sum of money at 5.5% compounded semi-annually until he was 65. At that time he converted the existing balance into an ordinary annuity paying $10 250.00 every month, with interest at 5% compounded monthly. How many payments will be made?

Accepted Answer

A) 252 
B) 21 
C) 271 
D) 183 
E) 23

Question 17

A lease valued at $47 600.00 requires payments of $4500.00 every three months. If the first payment is due 2 years after the lease was signed and interest is 6.88% compounded quarterly, what is the term of the lease?

Accepted Answer

The answer of A lease valued at $47 600.00 requires...

Question 18

If you want to be able to set up a scholarship fund that will last forever and you feel that you can earn 4.8% compounded annually. How much money do you have to deposit today in order to be able to provide 6 scholarships of $3000 each?

Accepted Answer

A) $735 000.00 
B) $375 000.00 
C) $37 500.00 
D) $357 000.00 
E) $333 000.00

Question 19

A lease requires semi-annual payments of $6100.00 for 7.5 years. If the first payment is due in 3 years and interest is 9.72% compounded monthly, what is the cash value of the lease?

Accepted Answer

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Question 20

A man received a separation payment of $98 000.00 at age 56. He invested that sum of money at 8.5% compounded semi-annually until he was 65. At that time he converted the existing balance into an ordinary annuity paying $6150.00 every 6 months, with interest at 5% compounded semi-annually. How many payments will be made?

Accepted Answer

The answer of A man received a separation payment of...

Exam 13: Annuities Due, Deferred Annuities, and Perpetuities