1

.docx

School

Humber College *

*We aren’t endorsed by this school

Course

CSC252

Subject

Finance

Date

Jan 9, 2024

Type

docx

Pages

Uploaded by joyal6200

1.Sonali is a member of her employer's DPSP. If she earns $85,000 and the money purchase limit for the year is $27,830, what is the MAXIMUM contribution that can be made to the DPSP on behalf of Sonali? a) $13,915 2. Roger has been working for the same employer since January 1, 1986. In January 1987, he became a member ofSave All AnswersSave and SubmitSave and SubmitSave All Answershis employer's registered pension plan. On September 31, 2002, Roger's job was terminated, and he was given aseverance allowance of $25,000. How much of this amount was he permitted to rollover into his RRSP? 21,500 3. After 29 years with ACME Manufacturing, Richard accepted a retirement package on December 31, 2001. He began working for ACME on January 2, 1973. The pension plan, which he joined in 1982, provided a pension of 2% for each year of plan membership, based on his earnings in his last five years and indexed to inflation. Richard's salary has been frozen at $67,000 for the last five years. His retiring allowance consisted of one week of pay for each year of employment and an allowance of six months' salary. If Richard transfers the maximum permissible amount of his retiring allowance into an RRSP, what amount of his retiring allowance must he receive in taxable income? 11,365 4. Six years ago in January, Janet contributed $6,000 to a spousal RRSP for her husband, Chris. Two years ago, Janet purchased another spousal RRSP in the amount of $2,000, from a different institution. Last year, Chris withdrew $3,000 from the original RRSP. How did this affect Janet's taxable income for the year? b) it increased her taxable income by $2,000 5. Which of the following statements is NOT true about retirement savings? No tax is ever paid on money paid into sheltered savings plans. 6. Which one is true? c) A dollar today is worth less in terms of purchasing power then it was worth four years ago. 7. In March of this year, Amanda invested $2,800 in a TFSA. This year was the first year Amanda did not maximize her TFSA contribution room. In June, she withdrew $1,500 to pay for veterinarian bills after her cat required minor surgery. If the TFSA dollar limit this year is $5,500 and it is expected to remain at the same level next year, how much will Amanda be able to contribute to her TFSA next year? 9700

8. Demi is a Canadian citizen. She has an RRSP account in which she has currently invested $5,000,000 in mutual funds. The real return on her mutual funds is expected to be 7% over the ten years until her retirement. How much will she have at retirement in 10 years? a) $9,835,757 9. The Keatons have a 9-year-old daughter, Amy, who is expected to attend university when she is 18 years old. They estimate that it will cost Amy $10,000 per year for four years of university. If the Keatons believe that education will rise by 10% per year, what are their estimated total costs adjusted for inflation? (Round all your calculations to the nearest dollar) a) $9,835,757 10. candice pension will be reduced by 0.6% for each month that the start date of her retirement precedes her 65th birthday. at 63 she would incur a 14.4% reduction on the maximum benefit. therefore [800 - (800*(24*0.6))] = $684.8 11. As a result of a work place injury, Mary is receiving the maximum allowable CPP disability pension. Which one of her dependents is entitled to the disabled contributor's child benefit? a) Tom, who is 17, attends school part-time. 12. John is investing $1,000 at the end of every six months for two years. John was able to invest the money at 8% compounded semi-annually. Calculate the annuity's future value at the end of the two years? c) $4,246.46 13. Sarah deposits $1,000 at the beginning of each of the next four years in TD Bank, which will pay her interest of 4.25% per year compounded annually. How much will she have at the end of the four years? 4443.5 14. Which is not one of the four qualifications for the CPP disability benefit? d) The applicant must have contributed for the past six ye 15. Which is not a type of CPP Survivor Benefit? a) Accidental death and dismemberment benefit 16. Under a non-contributory plan: d) Only employers make contributions. 17. Kwan is a member of a defined contribution pension plan at work. He earns $60,000 a year. His pension plan calls for both him and his employer to contribute 6% of his salary to his pension plan. Calculate his pension adjustment for the current year if the money purchase limit is $24,270.

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