STUDY 11A

Make the month-end deposits into RESP of $50 for 14 years. 17 years from now, their son will be able to withdraw money at the beginning of every year from the RESP for his university education for five years. During the first 17 years, their money will be growing at 9% compounded monthly, and thereafter, they will move the RESP to a fund that earns 10% compounded annually for the next five years.

Save the lump sum amount of $50,000 in the RRSP at 6% compounded quarterly. When Elijah is 67-years-old, withdraw one-fourth of the accumulated amount and donate it to his college to create the endowment fund.

Convert the balance amount in the RRSP to an annuity paying $42,000 annually.

What would be their sons first withdrawal amount for his five-year university education?

How long would they receive their pension amount?

What would be the scholarship that students receive at the beginning of every six months in perpetuity if the college creates an endowment fund on Elijahs 67^th birthday, and the fund earns 8% compounded quarterly.