You are 25 years old and you plan to retire when you get to 65 years old. After you retire, you intend to withdraw $ 4,000 per month for living expenses until you get to 80 years old, then you will stay in an old age home , everything is paid for. In order to do this, you will secure a RRSP in which you contribute 6% per annum with the first payment starting now. You currently have $ 20,000 in a bank that drew 8% interest in the past that you want to put in as part of the contribution.

The amount required at retirement to allow you to do the above will be:

Select one:

a. $ 424,000

b. $ 474,000

c. $ 538,000

d. $ 576,000

e. $ 382,000

The monthly contribution to your RRSP that allows you to accumulate the amount calculated in Q.1) is:

Select one:

a. $ 100

b. $ 125

c. $ 150

d. $ 170

e. $ 195

If you decide to forgo the $ 20,000 mentioned in the problem, your monthly contribution that would still allow you to withdraw $ 4,000 per month would be:

Select one:

a. $ 180

b. $ 100

c. $ 205

d. $ 235

e. $ 275