Last Name: First Name: 1. Philip has saved $500,000 in his RRSP. He will use these funds to purchase an annuity that will pay him at the end of each month for 25 years starting one month from today. The interest rate on the annuity is 6.9% compounded monthly. Find the monthly payment and the total interest earned. [3 marks] BGN P/Y CHY N I/Y PV PMT FV 500,000 ANSWER (2 decimals): Payment = Interest 2. You want to purchase your first home and need $20,000 for a down payment. You can save $850 at the end of every quarter. If you deposit this amount in an account paying 6.71% interest compounded quarterly, how long will it be before you can purchase a home? Express your answer in MONTHS. [3 marks] BGN P/Y CY N I/Y PV PMT FV ANSWER: 3. Nine months ago you bought $40,000 worth of equipment. You paid $5,000 immediately and agreed to pay off the rest with three payments. Three months ago you made your first payment of $13,000 and will make 2 equal payments in 3 months and one year (from today). The interest rate is 8% compounded quarterly. Suggested focal date: one year from now. (a) Do a well-labelled time diagram. [1 marks]