Asked by Oliver Price on May 16, 2024
Verified
Mr. and Mrs. Krenz are contributing to a Registered Education Savings Plan
(RESP) they have set up for their children. What amount will they have in the RESP after eight years of contributing $500 at the end of every calendar quarter if the plan earns 6% compounded monthly? How much of the total amount is interest?
Compounded Monthly
A method of calculating interest where the earned interest is added to the principal at the end of each month, resulting in interest earned on interest in subsequent months.
Calendar Quarter
A period of three consecutive months within a calendar year used for financial and business reporting.
- Determine the value of regular contributions to savings plans over time, taking into account compound interest.
Verified Answer
MP
Learning Objectives
- Determine the value of regular contributions to savings plans over time, taking into account compound interest.