RRSP Deposit
Q1-Robert made equal deposits at the beginning of every 3 months into an RRSP. At the end of 8 years, the fund had an accumulated value of $45,000. If the RRSP was earning 4.50% compounded monthly, what was the size of the quarterly deposits?
Q2-Robert received a $29,350 loan from a bank that was charging interest at 4.50% compounded semi-annually.
a. How much does she need to pay at the end of every 6 months to settle the loan in 5 years?
b. What was the amount of interest charged on the loan over the 5-year period?
Q3-A loan of $36,000.00 at 5.00% compounded semi-annually is to be repaid with payments at the end of every 6 months. The loan was settled in 5 years.
a. Calculate the size of the periodic payment.
b. Calculate the total interest paid.
Q4-Blake made periodic deposits into a savings account at the end of every month for 5 years. The investments were earning 6.00% compounded quarterly and grew to $12,375.00 at the end of 5 years.
a. Calculate the size of the month-end deposits.
b. How long will it take for the $12,375.00 to accumulate to $31,365.00 if the interest rate remained the same and he continued making the same month-end deposits throughout the term?
Q5-Lush Gardens Co. bought a new truck for $60,000. It paid $6,000 of this amount as a down payment and financed the balance at 4.24% compounded semi-annually. If the company makes payments of $1,900 at the end of every month, how long will it take to settle the loan?
Years? Months?
Q6-You plan to save money for a down payment of $32,000 to purchase an apartment. You can only afford to save $6,000 at the end of every 6 months into an account that earns interest at 5.50% compounded monthly. How long will it take you to save the planned amount?
Years? Months?