Tom plans to build up his RRIF (Registered Retirement Income Fund) by making regular deposits into his RRSP
(Registered Retirement Savings Plan) now. When he retires 22 years from now, Tom would like to receive
$2,000 at the end of every six months for seventeen years. Assume the interest rate for both the RRSP and
RRIF will be 5.05% compounded semi-annually.
1) How much would Tom have to have in the RRIF at the beginning of his retirement to receive these payments
of $2,000 each at the end of every six months?
$
2) What payment will Tom have to regularly make now at the end of every six months into his RRSP so that
there is enough money in the RRIF at the start of his retirement?