Reference no: EM132575983

Question 1: Rounded to the nearest quarter year, how long will it take an investment to quadruple if it eatns 8% compounded semi-annually?

Question 2: A life insurance company pays investors 8% compounded annually on its five-year GICs. For you to be indifferent as to which compounding option you choose, what would the nominal rates have to be on GICs with quarterly compounding? Interim calculations should be to 5 decimal places; final answer to the nearest .01%

Question 3: A rental agreement requires the pay ment of $1000 at the beginning of each month. What single payment at the beginning of tl1e rental year should the landlord accept instead of twelve-monthly payments if money is worth 5% compo11nded monthly?

Question 4: Roger Baker has accun1ulated $400,000 in his RRSP and is going to purchase a 25-year annuity from which he will receive month-end payments. The money used to purchase the annuity will earn 4.8% compounded monthly. If payme11ts grow by 2.4% compounded monthly, what will be the initial payment? Interim calculations should be to six decimal places; final answer to the nearest cent.

Question 5: What amount is required to fund a perpetuity that pays $12,000 at the beginning of each quarte r? The funds can be invested to earn 6% compounded quarterly. Interim calculations should be to 4 decimal places; final answer to nearest cent.