Q: Mr. Braun wants the value of his RRSP 25 years from
Mr. Braun wants the value of his RRSP 25 years from now to have the purchasing power of $400,000 in current dollars. 1. Assuming an inflation rate of 2.5% per year, what nominal dollar amount should M...
See AnswerQ: NI = (CM)X – FC, contains three two
NI = (CM)X – FC, contains three two-letter symbols. Use it to calculate CM if NI = $15,000, X = 5000, and FC = $60,000.
See AnswerQ: 1. How long will it take monthly payments of $600
1. How long will it take monthly payments of $600 to repay a $65,000 loan if the interest rate on the loan is 9.5% compounded semiannually? 2. How much will the time to repay the loan be reduced if th...
See AnswerQ: A 70-year-old man can purchase either of the
A 70-year-old man can purchase either of the following two annuities for the same price from a life insurance company. A 20-year-term annuity will pay $394 at the end of each month. A life annuity wil...
See AnswerQ: Noreen’s RRSP is currently worth $125,000. She plans
Noreen’s RRSP is currently worth $125,000. She plans to contribute for 10 more years and then let the plan continue to grow through internal earnings for an additional five years. If the RRSP earns 8%...
See AnswerQ: $30,000 is placed in a fund earning 7%
$30,000 is placed in a fund earning 7% compounded quarterly. How many quarterly withdrawals of $2000 can be made if the first withdrawal occurs three years from today? Count the final withdrawal, whic...
See AnswerQ: Georgina is about to retire with $188,000 in her
Georgina is about to retire with $188,000 in her RRSP. She will make no further contributions to the plan, but will allow it to accumulate earnings for another five years. Then she will purchase an an...
See AnswerQ: By the time he turns 60, Justin (just turned age
By the time he turns 60, Justin (just turned age 31) wants the amount in his RRSP to have the purchasing power of $250,000 in current dollars. What annual contributions on his 32nd through 60th birthd...
See AnswerQ: An advertisement for Ford trucks offered “2.9% financing
An advertisement for Ford trucks offered “2.9% financing (for 48 months) or $2000 cash back.” A truck buyer financed $20,000 at the low interest rate instead of paying $18,000 cash (after the $2000 re...
See AnswerQ: What price will a finance company pay for a conditional sale contract
What price will a finance company pay for a conditional sale contract requiring 15 monthly payments of $180.50, if the company requires a rate of return of 21% compounded semiannually? The first payme...
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