Question 3

Your grandfather is retiring at the end of next year. He would like to ensure that he, and after he dies, his heirs receive a payment of $12 309 a year forever, starting when he retires. If he can invest at 7.9 per cent per annum, how much does need to invest to receive the desired cash flow?

Answers:

Question 4

Jojo plans to save $5,613 every year for the next 10 years, starting today. At the end of 10 years, Jojo will turn 32 years old and plans to use his savings toward the deposit on a house. If his investment in an investment fund will earn him 8.5 per cent annually, how much will he have saved in 10 years when he will need the money to buy a house?

Answers: