An annuity paying $1400 at the end of each month (except for a smaller final payment) was purchased with $225,000 that had accumulated in an RRSP The annuity provides a semiannually compounded rate of return of 5 2 a What amount of principal will be included in Payment 137 b What will be the intere...

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An annuity paying $1400 at the end of each month (except for a smaller final payment) was

Question:

An paying $1400 at the end of each month (except for a smaller final payment) was purchased with $225,000 that had accumulated in an RRSP. The provides a semiannually compounded rate of return of 5.2%.
a. What amount of principal will be included in Payment 137?
b. What will be the interest portion of Payment 204?
c. How much will the principal be reduced by Payments 145 to 156 inclusive?
d. How much interest will be paid in the twentieth year?
e. What will be the final payment?
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,...