Sylvia plans to invest $ 350 into her RRSP at the end of each month. What...

Sylvia plans to invest $ 350 into her RRSP at the end of each month. What will be the value of RRSP in 25 years if the RRSP earns 4.7% compounded monthly?

Expert Solution

FV of annuity	=	P * [ (1+r)^n -1 ]/ r

Periodic payment	P=	$ 350.00

rate of interest per period	r=
Rate of interest per year		4.7000%

Payment frequency		Once in 1 months
Number of payments in a year		12.00
rate of interest per period		0.047*1/12	0.3917%

Number of periods
Number of years		25
Number of payments in a year		12
Total number of periods	n=	300

FV of annuity	=	350* [ (1+0.00392)^300 -1]/0.00392

FV of annuity	=	199,340.91

Value of RRSP in 25 years is $199,340.91

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jeff jeffy answered 2 years ago

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