[102] You just celebrated your 40th birthday. You dream about retiring when you turn 55. You currently have $80,000 accumulated in your retirement plan. You decide to make deposits each month into a retirement plan for exactly 15 years, starting today. You want to purchase an annuity that will pay you $6,000 per month for 10 years, with the first withdrawal starting one month after your 55th birthday. The retirement plan and the annuity earn 6% compounded monthly.
a. How much must you deposit each month into your retirement plan?
b. How much interest will you earn over the ENTIRE 24 years?
[103] Barney just celebrated his 40th birthday. He currently has $52,034 accumulated in his retirement plan, and he plans to continue making equal monthly deposits into a savings account for 15 years, starting today. Two months after his last deposit, he intends to withdraw $4,000 per month for his living expenses for a period of 5 years. The invested funds earn 6%, compounded monthly, for the entire 20 years.
a. Find the size of the monthly deposits.
b. How much interest will he earn over the entire 20 years?
[104] You have $50,000 in your RRSP today. For the next 12.5 years, you will contribute $500 per month into your RRSP with the first deposit made one month from now. How much will you have in your RRSP at the end of 12.5 years if you earn 6.9598% compounded monthly on your RRSP?
[105] You take out a loan for $50,000 and make monthly payments of $500, with the first payment made one month from now. If the interest rate on the loan is 6.9598% compounded monthly, how long (in months) will it take you to pay off the loan?
[106] Starting today, you will contribute $695.09 per month into an RRSP for a period of 5 years. You will then use the accumulated funds to purchase an annuity with monthly payments paid out over 12.5 years. What will be the size of the monthly withdrawals if the first withdrawal is made 2 months after the last deposit? Assume you earn 6.9598% compounded monthly the entire time.
[107] What amount will be in an RRSP after 20 years if monthly contributions of $300 are made for the first 15 years and then contributions of $600 per month are made for the subsequent 5 years? The first deposit is made one month from now, and the funds invested in the RRSP earn 7% compounded monthly.
[108] Starting today, you will contribute $1,200 every 3 months into your RRSP for five years. The interest rate was 10% compounded quarterly for the first 2 years and 9% compounded quarterly for the last 3 years. How much will you have in your RRSP at the end of 5 years?
[109] Herb has made contributions of $2,000 to his RRSP at the end of every 6 months for the past 8 years. The RRSP has earned 9.5% compounded semiannually. Today, he moved the funds to a different play, paying 8% compounded quarterly. He will now contribute $1,500 at the end of every 3 months. How much will he have in his RRSP 7 years from now?
[110] The Alumni Association of BCIT would like to set up a scholarship that will pay out $2,000 every 6 months forever. The funds will be deposited in an account that earns 8.16% effective. The first scholarship will be awarded 2 years after the funds are deposited. How much money do they need to set aside today?
[111] You plan to contribute $900 every 6 months into your retirement plan for a period of 15 years. How much INTEREST would you earn over the 15 years if your RRSP earns 7% compounded monthly? The first contribution is made 6 months from now.
[112] Barney just celebrated his 25th birthday. Starting today, he will make contributions every month into his retirement plan for a period of 30 years. How much must Barney contribute every month to his retirement plan so he can withdraw $5,000 per month for a period of 20 years with the first withdrawal starting two months after his last deposit? Assume Barney earns 8.5%, compounded quarterly, the entire time.
[113] Marika has already accumulated $18,000 in her RRSP. If she contributes $2,000 at the end of every 6 months for the next 10 years, and $300 per month for the subsequent 5 years, what amount will she have in her plan at the end of the 15 years? Assume that her plan earns 9%, compounded semi annually, for the first 10 years and 9% compounded monthly for the next 5 years.
[114] How much larger will the value of an RRSP be at the end of 25 years if the contributor makes month-end contributions of $300 instead of year-end contributions of $3,600? In both cases, the RRSP earns 8.5%, compounded semi-annually.
[115] What will be the amount in an RRSP after 25 years if contributions of $2,000 are made at the beginning of each year for the first 10 years and contributions of $4,000 are made at the beginning of each year for the subsequent 15 years? Assume that the RRSP earns 8%, compounded quarterly.
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