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Roger Baker has accumulated $775,000 in his RRSP and is going to purchase a 20-year annuity...

  1. Roger Baker has accumulated $775,000 in his RRSP and is going to purchase a 20-year annuity from which he will receive month-end payments. The money used to purchase the annuity will earn 3.8% compounded monthly. If payments grow by 2% compounded monthly, what will be the initial payment?                                                                            (Total: 9 marks)

Interim calculations should be to six decimal places; final answer to the nearest cent.

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