Question 1200912: Robert opened an RRSP deposit account on December 1, 2008, with a deposit of $1700. He added $1700 on November 1, 2010, and $1700 on April 1, 2012. How much is in his account on September 1, 2016, if the deposit earns 5.1% p.a. compounded monthly?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! he deposits 1700 on december 1, 2008
he adds 1700 on november 1, 2010
he adds 1700 on april 1, 2012.
howmuch is in his account on september 1, 2016.
deposit earns 5.1% per year compounded monthly.
5.1% per year copounded monthly = 5.1/12 = .425% per month.
divide that by 100 and add 1 to it to get a growth factor of 1.00425 per month.
initial deposit is on december 1, 2008.
december 1, 2008 to december 1, 2015 is 7 years.
7 years * 12 = 84 months.
september 1, 2016 is 9 months after that.
total montha from december 1, 2008 to september 1, 2016 is 84 + 9 = 93.
future value of 1700 from december 1, 2008 to september 1, 2016 is equal to 1700 * 1.00425 ^ 93 = 2521.970945.
first additiional deposit is on novembr 1, 2010.
november 1, 2010 to november 1, 2016 is 6 years.
6 years * 12 = 72 months.
september 1, 2016 is 2 months before that.
total months from november 1, 2010 to september 1, 2016 is 72 - 2 = 70
future value of 1700 from november 1, 2010 to septembver 1, 2016 is equal to 1700 * 1.00425 ^ 70 = 2287.587684.
second additional deposit is on qpril 1, 2012.
april 1, 2012 to april 1, 2016 is 4 years.
4 years * 12 = 48 months.
september 1, 2016 is 5 months after that.
total months fromm april 1, 2012 to september 1, 2016 is 48 + 5 = 53.+
future value of 1700 from april 1, 2012 to september 1, 2016 is equal to 1700 * 1.00425 ^ 53 = 2128.74664753.
total future value on september 1, 2016 is the sum of all 3 of those value = 6930.02 rounded to the nearest penny.
that's what will be in the account on september 1, 2016.
that's your solution.
i used excel to confirm the calculations are correct.
they are, to the best of my knowledge.
here's what excel showed.
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