Hey forum, got 2 questions today worked through the first one and my answers off by a few hundred so wanna figure out what im doing wrong there and the second one i got as far as i could but then i got to doing linear interpolation and got stuck.
First question - A man aged 40 deposits $5000 at the beginning of each year for 25 years into an RRSP paying interest at j1=7%. Starting on his 65th birthday he makes 15 annual withdrawals from the fund at the beginning of each year. During this period ( from his 65th birthday and on) the fund pays interest at j1= 6%. Determine the ammount of each withdrawal starting at age 65. Answer is supposed to be $32868.66 but im getting R= $32561.4787.
S=5000[ (1.07^25)-1 / .07 ] = 316245.1886
316245.1886 = R [ 1-(1.06^-15)\.06 ] =R=32561.4787
I used the formulas S=Rsni and A=Rani
Second Question -A television set sells for $700.Sales Tax of 7% is added to that. The TV may be purchased for $100 down and monthly payments of $60 for one year. What is the interest rate j12? what is the annual effective rate?
Answers are 19.61%, 21.47%
749 = 100+60ani = 649/60=ani = 10.81666667 = k
i=[ 1-((10.81666667/12)^2) / 10.81666667 = .017334
Dont know where to go from there if i am even doing it right, but i used the formulas A=rani and i=(1-(k/n)^2)/k
any help is appreciated