Asked by RaeAnne Garcia on Jun 10, 2024
Verified
Mr. Dickson purchased a 7-year, $30,000 compound-interest GIC with funds in his RRSP. If the interest rate on the GIC is 4.25% compounded semi-annually, what is the GIC's maturity value?
Compounded Semi-annually
The process of applying interest to both the principal amount and any accumulated interest every six months.
RRSP
A Registered Retirement Savings Plan, which is a retirement savings and investing vehicle for employees and the self-employed in Canada, offering tax benefits.
Maturity Value
The amount of money an investment will grow to over a period of time at a specified interest rate.
- Familiarize oneself with the concept of compound interest and apply these calculations across different compounding frequencies.
- Conduct an analysis and comparison of diverse savings and investment choices, encompassing Guaranteed Investment Certificates, Registered Retirement Savings Plans, and loans.
- Determine the anticipatory value of investments under diverse financial rates, duration periods, and compounding rates.
Verified Answer
LZ
Learning Objectives
- Familiarize oneself with the concept of compound interest and apply these calculations across different compounding frequencies.
- Conduct an analysis and comparison of diverse savings and investment choices, encompassing Guaranteed Investment Certificates, Registered Retirement Savings Plans, and loans.
- Determine the anticipatory value of investments under diverse financial rates, duration periods, and compounding rates.