A 20-year annuity was purchased with $180,000 that had accumulated in an RRSP. The annuity provides a

Question:

A 20-year was purchased with $180,000 that had accumulated in an RRSP. The provides a semiannually compounded rate of return of 5% and makes equal month-end payments.
a. What will be the principal portion of Payment 134?
b. What will be the interest portion of Payment 210?
c. How much will the annuity’s balance be reduced by Payments 75 to 100 inclusive?
d. How much interest will be paid in the sixth year?
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...