Question 1

Mr. Sepaba accumulated $600 000.00 in an RRSP. He converted the RRSP into an RRIF and started to withdraw $3000.00 at the end of every month from the fund. If interest is 4.5% compounded yearly, for how long can Mr. Sepaba make withdrawals?

Accepted Answer

The answer of Mr. Sepaba accumulated $600 000.00 in an...

Question 2

Note: The calculations for this question were done using Excel's RATE function.
A $160 000.00 mortgage with a 20-year term is repaid by making monthly payments of $1361.00. What is the rate of interest compounded semi-annually on the mortgage?

Accepted Answer

The answer of Note: The calculations for this question were...

Question 3

Keith bought a lakeside cottage for 30% down and monthly mortgage payments of $1224.51 at the end of each month for 20 years. Interest is 4.4% compounded semi-annually. What is the purchase price of the property?

Accepted Answer

A) $194 378 
B) $195 881 
C) $278 878 
D) $279 831 
E) $254 646

Question 4

You miss the 11th to 13th payments of a loan. The loan payments are $519.27 each month and the interest rate is 8.45% compounded annually. How much are you behind in your payments on the day that you miss the 13th payment?

Accepted Answer

A) $1658.40 
B) $1586.40 
C) $1568.40 
D) $1508.40 
E) $1458.40

Question 5

For their daughter's future education David and Bonnie set a fund in which they invest at the end of every six months. The first investment is $100 and they plan to increase their investments at a constant rate of 0.5%. If the fund earns 2 .4% compounded semi-annually, how much money will be in the fund in 16 years when their daughter goes to college?

Accepted Answer

The answer of For their daughter's future education David and...

Question 6

Sam got a job at the Brick. He plans to save $500 every month for 3 years to buy a car. The savings account earns 2.25% compounded semi-annually. If he puts the money in his savings account at the end of each month, what will be the present value of the balance in the account at the end of the three-year term?

Accepted Answer

A) $18 600.50 
B) $18 408.04 
C) $18 603.37 
D) $17 392.96 
E) $17 390.19

Question 7

Note: This problem is solved using CalcPro for iPad
Lahore Gym allows members to pay the members to pay the annual membership fee by a single payment of $240 at the beginning of the year, or by payments of $22 at the beginning of each month. What effective rate of interest is paid by members, who choose to pay by month?

Accepted Answer

The answer of Note: This problem is solved using CalcPro...

Question 8

How much must be contributed into an RRSP at the end of each year for 37 years to accumulate to $213 000.00 if interest is 8.04% compounded quarterly?

Accepted Answer

The answer of How much must be contributed into an...

Question 9

Note: The calculations for this question were done using Excel's RATE function.
A property worth $15 000.00 is purchased for 10% down and semi-annual payments of $1750.00 for twelve years. What is the effective rate of interest if interest is compounded semi-annually?

Accepted Answer

The answer of Note: The calculations for this question were...

Question 10

Siri plans to retire when her simple annuity savings account has enough money to receive $10 000.00 per month for twenty years starting at the end of the first month after her retirement. She starts saving $4420 per month. Calculate when should Siri retire from today if her savings account pays 4.9% compounded semi-annually.

Accepted Answer

A) 18 years 
B) 216 years 
C) 217.35 years 
D) 18.11 years 
E) 36 years

Question 11

Bhamani is contributing to a RESP they have set up for their grandchildren. What amount will they have in the RESP after 13 years of contributing $185 at the end of every month if the plan earns 5.5% compounded quarterly?

Accepted Answer

The answer of Bhamani is contributing to a RESP they...

Question 12

Mark deposits $900 at the end of each month in a savings account earning 4.5% quarterly. How soon can he buy his first car assuming that he needs $8 000 for a decent car.

Accepted Answer

A) 8.76 months 
B) 8.52 months 
C) 9.06 months 
D) 9 years 
E) 8.86 months

Question 13

How much must be deposited at the end of each month for 10 years to accumulate to $100 000.00 at 6.00% compounded yearly?

Accepted Answer

The answer of How much must be deposited at the...

Question 14

Mr. Lavergne accumulated $320 000.00 in an RRSP. He converted the RRSP into an RRIF and started to withdraw $7500.00 at the end of every three months from the fund. If interest is 4.68% compounded monthly, how many withdrawals can Mr. Lavergne make?

Accepted Answer

The answer of Mr. Lavergne accumulated $320 000.00 in an...

Question 15

A series of payments of $900 are being made at the end of each year for the next 8 years. What is the future value 8 years from now, if money can earn 9% compounded semi-annually?

Accepted Answer

A) $9999 
B) $30 220 
C) $77 200 
D) $14 346 
E) $7200

Question 16

What is the discounted value of $3000.00 paid at the end of every six months for 5 years if interest is 8.00% compounded yearly?

Accepted Answer

The answer of What is the discounted value of $3000.00...

Question 17

You buy a motorcycle for $52 523 plus freight of $724 and other delivery charges of $561. You have saved 25% of the total purchase price towards a down payment. The bank is willing to finance the purchase of the motorcycle at 9.86% compounded quarterly. What is the size of your monthly payment if the loan is for 4.5 years?

Accepted Answer

A) $296.80 
B) $926.80 
C) $962.80 
D) $996.80 
E) $262.80

Question 18

Sabrina deposits $300.00 into a savings account at the end of each month for five years. If the accumulated value of the deposits is $20 000.00 and interest is compounded semi-annually, calculate the nominal rate of interest

Accepted Answer

The answer of Sabrina deposits $300.00 into a savings account...

Question 19

You won $150 000.00 in a lottery and you want to set some of that sum of money aside for 6 years. After 6 years you would like to receive $2710.00 at the end of every 6 months for 8 years. If interest is 6% compounded quarterly, how much of your winnings must you set aside?

Accepted Answer

The answer of You won $150 000.00 in a lottery...

Question 20

If a loan was repaid by semi-annual payments of $4720.00 in 6.5 years at 8.24% compounded quarterly, how much interest was paid?

Accepted Answer

The answer of If a loan was repaid by semi-annual...

Exam 12: Ordinary General Annuities