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IN CLASS ASSIGNMENT November 2 1 s t , 2 0 2 3 Monarch Distributing Ltd . plans to accumulate funds for the purchase of

IN CLASS ASSIGNMENT
November 21st,2023
Monarch Distributing Ltd. plans to accumulate funds for the purchase of a larger warehouse seven years from compounded semiannually, what amount (rounded to the nearest dollar) will Monarch accumulate by the end of the seven years? Ans: $987,375
Michael Raby has subscribed to a dollar cost averaging program in which he invests $1000 at the beginning of each month. If his rate of return is 6% compounded monthly, what will be the value of his account 5 years later? (Source: ICB course on Wealth Valuation.) Ans: $70,118.88 Ans: $70,118.88
Mary and Steve Farmer pian to invest $2000 at the beginning of each year in a RRS. What will be the value of the plan after 12 years if it earns 7.5% compounded annually? (Source: CIFP course on Personal Financial Planning.) Ans: $39,611.02
If Hans contributes $1500 to his RRSP on February 1,1990, and every six months thereafter to and including February 1,2017, what amount will he accumulate in the RRSP by August 1,2017? Assume that the RRSP will earn 8.5% compounded semiannually. How much of the total will be interest? Ans: $326,252.08;$243,752.08
Many people make their annual RRSP contribution for a taxation year close to the end of the year. Financial advisers encourage clients to contribute as early in the year as possible. How much more will there be in an RRSP at the end of 25 years if annual contributions of $5000 are made at the beginning of each year instead of at the end? Assume that the RRSP will earn:
a)8% compounded annually. b)8% compounded monthly
Ans: a) $29,242.38; b) $31,700.88
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