(SOLVED) Contributions of $116.09 are made at the beginning of every three months into an RRSP for 10 years.

Discipline: Finance

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 1-2)

Paper Format: APA

Pages: 1 Words: 66

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Question

Contributions of $116.09 are made at the beginning of every three months into an RRSP for 10 years.

What is the accumulated balance after 10 if interest is 3.9% compounded quarterly.

Expert Solution Preview

According to the question

Interest rate = 3.9%

This interest rate is compounded quarterly therefore monthly interest rate = 3.9 / 4 = 0.975%

Investment amount = $116.09

Duration of investment = 10 years

Total number of periods = 10 * 12 = 120 periods

Therefore

The amount =....