Thursday

February 26, 2015

February 26, 2015

Posted by **nikki** on Friday, May 2, 2014 at 11:00pm.

1. If the rate of inflation for the next 30 years is 2% per year, how much must she accumulate in her RRSP?

2. If she contributes $3000 at the end of each year for the next five years, how much must she contribute annually for the subsequent 25 years to reach her goal? Assume that her RRSP will earn 8% compounded interest annually.

3. The amount in Part (a) will be used to purchase a 30-year annuity. What will the month-end payments be if the funds earn 6% compounded interest monthly?

- math -
**Reiny**, Friday, May 2, 2014 at 11:09pm1. At a rate of inflation of 2%, the value of today's 300,00 in 30 years is

300,000(1.02)^30 = $ 543,408.48

2.

(3000(1.08^5 - 1)/.08) (1.08)^25 + x(1.08^25 - 1)/.08 = 543408.48

I will leave all that button-pushing up to you to solve for x

- math -
**Reiny**, Friday, May 2, 2014 at 11:11pm3.

x( 1 - 1.005^-360)/.005 = 543408.48

x = 3258.01 per month

**Answer this Question**

**Related Questions**

Finance - You are now 30 years old. You plan to retire in 30 years, and expect ...

Finance - You are 45 years of age and your asporation is to retire in 17 years ...

math..urgent pleasehelp :( - the purchasing power (in dollars) of an annual ...

finance - You wish to retire in 12 years and currently have $50,000 in a savings...

Finance - You wish to retire in 12 years and currently have $50,000 in a savings...

Retirement - 1. I would like to retire in 42 years at the age of 65. The average...

finance: retirement planning - Tyrone, age 25, expects to retire at age 60. He ...

Math: Finance - Need help solving these finance questions? PV = C/r PV= C/r-g P...

Finance - Simon wishes to have $400,000 in a retirement fund 20 years from now. ...

business - 29. Ray Long wants to retire in Arizona when he is 75 years of age. ...