BMTH 1003. Tnsr 28.

1.

November,2016

Adam Smith has accumulated $ 25,000 in his bank account in 8 years, how much has he deposited
at the beginning of every month if interest is j+ - 7 .2o/o and he always deposits the same amount?
(2 marks)

q$'

i ,t L'.
4_=

d't"NV

UrJ,t/Y=4

56T

?/7:12

r$

=12

t/y,1,L
YY= O

f:t' 25 Ooo
cpt WI . $rq2 54

2.

A scholarship fund is to be set up to provide annual scholarships payment of $6,000. If the first
payment is due five years after the deposit and interest is jz = 5.2o/o,how much should be

(4 marks)

deposited in the scholarship fund?

c/u'7 P/t= I

OE*

5.L
!L\^'-

1000

'/\.

5,2-

Ft'

-U

PMT' (oooo

w, +l I 1 103,W1
iro

ce.r

Nl--

l'5

't\ -, >.2

P{vtr

;y

{\ = llq 903 ,W5l

csr W=

17 +s1.+5

b
-/"

BMTH

1003.

Tnsr 28.

November,20l6

Pipeline Corporation has a stock that pays semi-annual dividend of $1.35. The stock sells for

4.

4nr FIJV , P/y. L

N' l0 o ?
*r I/,/ . 8,Lblz
7l = (33.22
PMT

(',1

5.

. 1 ,bq

" ,P

Mrs. Haze retired at age 55 and allowed her RRSP to grow for another 10 years. From the age of
65, she used all the money in her RRSP to supplement her pension by $ 1 ,650 at the end of each
month for the following twenty years. Calculate the size of her RRSP at the time of her retirement

if her money

earned

ir = 5.25%. .t'l

(4 marks)

-r1

{v(

fi +rT ;1Jb
ytr- 12

?/r,1.lL
,

< aD

'8. t''E
?t4{' lA50
Fl' n'

G)
\--l

N,\zt
t/\.s{L\
v]$/ a
r{= L+bD\+'qqg{
W -- l+ t4b 520 ' 43

BMTH

6.

1003.

Tnsr 28.

November,20l6

A $280,000 mortgage is to be amortized by making monthly payments for 25 years, and an interest of

iz =

a.

4.23o/o is guaranteed for a five-year term.

Compute the size of monthly payment.

(2 marks)

2 ,r\' ,"

<eT 6Jb, C/,1.

t \Z {2{
'8= 413
Trt - (zwwo

t'\

Fl= O
cpT

b.

R\nI =lf tsOf

Determine the balance at the end

Ehyr-gfr l41.qg@
zNb \SrqorrT\

P,=P, =6o
WT

B4L,

#uq

ve-year term

(T "tz\

tn 6

If the mortgage is renewed for a new four-year term at s jz =

c.

monthly payment fqr the renewal term?

a!,{=**{"Y

(2 marks)

3.70oh, what is the size of the

(2 marks)

Y; r

c/1, z'uef 6r,JD r

:
frt ?-D x 11-

Qq: tL

,/\ -- 7,-JQ

Ptl,

(z+

1t1.bb)

{1, V
cpf frn\-= 4 t++o.qb

b
(//-"-

BMTH 1003. Tnsr28.

7

A three-year loan of

November,20l6

8,000 requires payments of $550 at the beginning of every month.

a. What is the nominal annual rate of interest compounded quarterly?

=fl 1%s ,?/'l ,

t{'12 xt
p\ = (txooo)
P{vtf

55O

l' D

ow'l\=w"

(2 marks)

eTD I

What is the effective rate ofinterest

(2 marks)

r@

2stb

'/\=4
0F(

zff'wET'/a

u
i
/t/'

BMTH

B.

1003. TBsr 28.

November,20l6

Mr. Jenkins has deposited $8000 at the end of every year for the last 22 years in his RRSP.
Assume that his RRSP earns,h = 7 .8Yo. He leaves the accumulated savings for 8 years more in
his RRSP account at the same rate of interest.

a.

How much will Mr. Jenkins have in total in his savings account at the end of the 30 years?

uu''P

qfrt"

,s

WAuFi'
@srr h{D P/,t. I t/\=
t\-- l

ZZ

J, a/,,/
rrl
6

N'
t4

(4 marks)

r'j

//

I*&

1'b
P\ - Ax'u14'j

Xi' I'b

q
cP( f! ' +lsr ng fr1

Ytl: g

PMT=

ni^l.(3ooo)
cPY FV

('l',2

'@J+14
b.

How much of his saving will be interest?

5A\,lb-\&F V$ fr'frWST =
nrtunr MoNry rNvE5E-D' (aOOOr'*22-)

c.

nb.

If Mr. Jenkins uses the accumulated value of the RRSP to buy a l0-year annuity with a rate of
jq - 7 .4%.What payment at the end of every month must he expect from the

return of

(3 marks)

annuity?

, 7/j = lL
$; VotD

5e.'r ND

lu1

'

CPT

'4

-]. 4

Pv'o8q
Y,{=

o/\

Ha

aq)

NOT'

q,,
,/

BMTH

9.

1003.

Tnsr 28.

November,2016

A $255,000 mortgage has interest of s j2 = 4.50%o. The mortgage is to be repaid by equal monthly
payments over 20 years. The mortgage contract permits lump-sum payments at each anrriversary
date up to 10oh of the original principal

a.

What is the balance at the end of a 4-year term

if a lump-sum

payment of $28,000 is made at

(5 marks)

N=

t\'

ND ,ri,1= lL tl\=
lr!' Z * 2O

6T

'/Y' 'q
4

W-- &%ooo)
F,,l=

cvr trtt41, +)bDl f33

'ac

ctr fltT'

e'"u IEMoFT
p, --?r= (12 "7)= 24
: uoMv6un4

eFfrsF PMr

,2i17 -a

bt'acl)

l4 | %,lttl.ne- Ywn
f

Wi:L.

--'-'*

ArrqT-

Yez

{ p,.?n.z
\,0'o BAL

=\#nry.11

How many more payments will be required after the 4-year term if there is no change in the
(3 marks)

interest rate?

-urAL p/n t
tus? Ay PPrf

(2O

"'^'

ertrxPce
'i on YR4@ AJ>
6
!2">
-V LFMggJ
I

(Z?rooo. oooD..,
f 2lo +bl

6TA I

b.

Frl- I

BALANI 8 +IU
op 2xru .{R

"194L. =4 Zag 4bl

* l8

w = (2lo

L'LA

12.

" W)

(t ^ w)

()

BMTII1003. Tnsr 28.

November,2016

10. Steve bought a 10-year annuity for $110,000 and interest of s 712
payments at the end of each year

c.

(2 marks)

How much is the periodic payment of the annuity?

eer END ,
N-- txlD

P/'l=

c11'",1?-

?nf

'0lo wo)

cPr n\^I

ANI'lu*L

$fieg"T
pwlT

'4= rn,z-

?v

- 6.20/o. The annuity makes

'lf ts

$t52t6tv
l5 a5.l+

2t6, l-4*

41017't0

Wict?AL

p/\f

$et41.T

WLA'y'E-
I lo ooo
Iot bo2.ot

t5Lt5.tT

,'a,

5
b

I
1

r0

d.

(1 marks)

How much of the 6ft payment is interest?

2'o l-@grj
7=P.=b
Jo
e.

grr

++D+b;74
payment?

(1 marks)

What is the remaining principal after the 8fr payment?

(2 marks)

How much is the principal portion of the

t'-@

P,'(o=

:"
f.

5nd

*to 4qs, Gq

FR.N

2"" lnyuoPf
?,"Yz.t b
oo

64r-.

/t"t"l*ttr, Nk

PPt

{z++fr,

Q
.r'

./"--