Q: Serge’s graduated commission scale pays him 3% on his first $
Serge’s graduated commission scale pays him 3% on his first $30,000 in sales, 4% on the next $20,000, and 6% on all additional sales in a month. What is his average commission rate on sales for a mont...
See AnswerQ: A Government of Canada bond will pay $50 at the end
A Government of Canada bond will pay $50 at the end of every six months for the next 15 years, and an additional $1000 lump payment at the end of the 15 years. What is the appropriate price to pay if...
See AnswerQ: Pierre and Pat wish to structure the payments from a 20-
Pierre and Pat wish to structure the payments from a 20-year annuity so that the end-of-quarter payments increase by $500 every five years. Maritime Insurance Co. will pay 5% compounded quarterly on f...
See AnswerQ: What is the maximum price you should pay for a contract guaranteeing
What is the maximum price you should pay for a contract guaranteeing month-end payments of $500 for the next 12 years if you require a rate of return of at least 8% compounded monthly for the first fi...
See AnswerQ: A mortgage broker offers to sell you a mortgage loan contract that
A mortgage broker offers to sell you a mortgage loan contract that will pay $800 at the end of each month for the next 3 1 2 years, at which time the principal balance of $45,572 is due and receivable...
See AnswerQ: A lottery offers the winner the choice between a $150,
A lottery offers the winner the choice between a $150,000 cash prize or month-end payments of $1000 for 12 1 2 years, increasing to $1500 per month for the next 12 1 2 years. Which alternative would y...
See AnswerQ: For its No Interest for One Year sale, Flemming’s Furniture advertises
For its No Interest for One Year sale, Flemming’s Furniture advertises that customers pay only a 10% down payment. The balance may be paid by 12 equal monthly payments with no interest charges. Flemmi...
See AnswerQ: An individual qualifying for Canada Pension Plan benefits may elect to start
An individual qualifying for Canada Pension Plan benefits may elect to start collecting the CPP monthly retirement benefit at any time between the ages of 60 and 70. If the retirement benefit starts a...
See AnswerQ: The British Columbia Teachers’ Pension Plan allows a teacher to begin collecting
The British Columbia Teachers’ Pension Plan allows a teacher to begin collecting a retirement pension before age 60, but the pension is reduced by 3% for each year the retiring teacher’s age is under...
See AnswerQ: An ordinary annuity consists of quarterly payments of $100 for 5
An ordinary annuity consists of quarterly payments of $100 for 5 1 2 years. What is the annuity’s present value, discounting at 10% compounded quarterly?
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