Asked by Jamie Stallings on Apr 23, 2024
Jacob is depositing $125 per month into his RRSP at an interest rate of 4.5% compounded monthly. How long will it take for his RRSP to accumulate to $10,000?
Compounded Monthly
Interest calculated on the initial principal and also on the accumulated interest from previous periods on a monthly basis.
RRSP
Registered Retirement Savings Plan, a savings account, registered with the Canadian government, that defers income taxes on retirement savings until withdrawal.
Accumulate
The act of gathering or collecting over a period of time, often resulting in an increase in quantity.
- Compute the prospective value of funds based on different compounding schedules.
- Deploy the idea of present value to figure out the amount of periodic contributions or payments.
- Evaluate the time necessary for clearing loans and achieving goals in savings plans.
Learning Objectives
- Compute the prospective value of funds based on different compounding schedules.
- Deploy the idea of present value to figure out the amount of periodic contributions or payments.
- Evaluate the time necessary for clearing loans and achieving goals in savings plans.