{A} = $4,064

{B} years = 20

{C} = $55,114.63

{D}% = 6.50%

Problem (Solve the problem using Excel function).

You have decided that you would like to retire at age 65. You would like your monthly pension to be {A}. Your RRIF (Registered Retirement Income Fund) earns 3.00% p.a. compounded semi-annually for 25 years after you retire.

REMEMBER: When using Excel for general annuities, rate = (1 + i) - 1

1. How much money do you need in your account when you retire?

2. How much money do you need in your account now (at your current age of {B} years)?

3. Once you retire, you intend to buy your dream car and will contribute a down payment of $10,000. If the vehicle costs {C} and can be financed for {D} compounded annually, what is your monthly payment on the vehicle if you finance for 96 months?