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FinanceQ&A Libraryquestion 11a. It is now January 1, 2018 you plan to make deposits of $500 each, one every 6 months, with the first payment being made today . if the bank pays a nominal interest rate of 12% but uses semi annual compounding, how much will be in your account after 10 years?1b. M.Mc. Donald has just started working with BNS as a sales rep. and is just trying to cathc up on money for retirement. BNS offers him a pension plan with an annuity that is guaranteed to earn 7% interest compounded anually. He plan to work for 10 years before retiring and would then like to be able to draw an income of $90'000 per annum for 15 years. How much must be deposited per annum into his retirement fund to accomplish this?1c.Abigail wish to establish a trust fund from which her daughter can withdraw $4000 every six months for 13 years, when she reach 13 years old. At the end of which she will receive the remaining money in the trust, which you would like to be $45'000. The trust will be invested at 8% per annum compounded semi- annually, How large should the trust be ?Question

Asked Sep 30, 2019

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question 1

1a. It is now January 1, 2018 you plan to make deposits of $500 each, one every 6 months, with the first payment being made today . if the bank pays a nominal interest rate of 12% but uses semi annual compounding, how much will be in your account after 10 years?

1b. M.Mc. Donald has just started working with BNS as a sales rep. and is just trying to cathc up on money for retirement. BNS offers him a pension plan with an annuity that is guaranteed to earn 7% interest compounded anually. He plan to work for 10 years before retiring and would then like to be able to draw an income of $90'000 per annum for 15 years. How much must be deposited per annum into his retirement fund to accomplish this?

1c.

Abigail wish to establish a trust fund from which her daughter can withdraw $4000 every six months for 13 years, when she reach 13 years old. At the end of which she will receive the remaining money in the trust, which you would like to be $45'000. The trust will be invested at 8% per annum compounded semi- annually, How large should the trust be ?

Step 1

Part 1a : Calculation of Amount(Future value) in account after 10 years on semi annual basis.

Calculation of Future Value Using Excel:

Step 2

The result of the above table is below:

Hence , the amount in the account after 10 years is $19,496.36

Step 3

Part 1b. Calculation of amount deposited per annum into his retirement fund.(PMT)

Calculation of ...

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