What lump sum will peter receive on his retirement

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Reference no: EM131956473

Peter intends to retire in 25 years time. he decides to save 500 at the start of each month until he retires. The pension fund is offering him a rate of 5.2% AER.

(A) (i) Find the rate of interest compounded monthly that would be equivalent to an AER of 5.2%, correct to 6 significant figures.

(ii) What lump sum will peter receive on his retirement?

(B) Peter uses his retirement fund to purchase an annuity at 4.2% AER. This will give him a repayment at the start of each month for the next 25 years. What will his monthly payment be?

Reference no: EM131956473

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