Harold, just turned 27, wants to accumulate an amount in his RRSP at age 60 that will have the purchasing power of $300,000 in current dollars. What annual contributions on his 28^th through 60^th birthdays are required to meet this goal if the RRSP earns 8.5% compounded annually and the rate of inflation is 2.5% per year?

Learning Objectives

• Develop an understanding and apply the principles of time value of money to determine present and future worth of assorted financial tools.
• Assess the needed quantum and span of installments for underpinning distinct financial ambitions, such as retirement planning, clearance of loans, and saving for educational or future monetary requirements.
• Calculate the effect of inflation on savings and investment plans.