QUESTION 1: To save for $4,250 in five years for a European vacation, one must save different amounts, depending on the frequency of the payments. Assuming one was contributing to a Tax-Free Savings Account (TFSA) that is paying a 1.75 percent rate of return, what would be required payments based on the following scenarios.

1.One deposit (lump sum) paid at the beginning of the five-year period, which compounded annually at 1.75 percent?

a.$3,253.26

b.$3,427.18

c.$3,896.88

d.$3,093.49

e.None of the Above

2.Monthly Payments, with 1.75 percent that is compounded monthly? (Remember payments are made at the BEGINNING of the Payment Period)

a.$68.23

b.$67.73

c.$74.71

d.$59.68

e.None of the Above

3.Biweekly Payments (26 payments per year), with 1.75 percent that is compounded biweekly? (Remember payments are made at the BEGINNING of the Payment Period)

a.$35.26

b.$27.82

c.$34.71

d.$31.27

e.None of the Above

4.Annually Payments, with 1.75 percent that is compounded annually? (Remember payments are made at the BEGINNING of the Payment Period)

a.$785.27

b.$867.17

c.$774.50

d.$806.65

e.None of the Above

QUESTION 2: To save for their retirement in 30 years in the future, a couple plan to make equal payments into a Registered Retirement Saving Plan (RRSP) in a balanced mutual fund. How much would they have 35 years in their RRSP account based on the following scenarios?

1.Biweekly payments of $150 (assuming 5 percent compounded biweekly)?

a.$306,735.35

b.$333,735.35

c.$265,674.85

d.$271,589.85

e.None of the Above

2.Monthly payment of $400 (assuming 5.75 percent compounded monthly)?

a.$418,670.15

b.$384,954.83

c.$403,183.39

d.$363,024.55

e.None of the Above

3.Annual payments of $4,600 (assuming 5.75 percent compounded annually)?

a.$404,542.17

b.$362,196.76

c.$368,069.93

d.$411,768.12

e.None of the Above

4.Weekly payments of $75 (assuming 5 percent compounded weekly)?

a.$321,392.93

b.$318,230.44

c.$271,580.79

d.$292,711.89

e.None of the Above

QUESTION 3: Greer purchased an investment property five years ago for $300,000. Other similar properties have increased in value an average of 5.5 percent per year over this five-year period. Assume annual compounding.

1.What would have been the estimated price of this property 1 year after Greer purchased it?

a.$312,000,00

b.$314,238.43

c.$316,500.00

d.$317,201.79

e.None of the Above

2.What would have been the estimated price of this property 2 years after Greer purchased it?

a.$333,907.50

b.$334,942.89

c.$344,966.14

d.$324,976.13

e.None of the Above

3.What would have been the estimated price of this property 5 years after Greer purchased it?

a.$396,298.98

b.$386,364.52

c.$392,088.00

d.$384,994.87

e.None of the Above