At age 65, a man takes his life savings of 600,000 and purchases a 20 year annuity with monthly

payments. What is the monthly

payment

if the interest rate is 3% compounded

daily?

2.

(2

marks)

Determine the present value

of a deferred perpetuity of $1000 per year if the first payment is due

at the end of six years.

The interest rate is

3.

(6

marks). A $300,000 mortgage is amortized over 25 years at an interest rate of 6% compounded semi

-

annually.

a.

You decide to make payments monthly, calculate the monthly payment.

b.

What is the total interest paid over the life of the mortgage (with monthly payments, exact answer)?

c.

If you decide to make payments weekly, what would the weekly payment

be?

d)What is the total interest paid over the life of the mortgage (with weekly payments, exact answer)?