Since the birth of his daughter, 15 years ago, Natalie has deposited $180.00 at the beginning of every month into an RESP. The interest rate on the plan was 3.90% compounded monthly for the first 10 years and 5.00% compounded monthly for the next 5 years. a. Calculate the value of the fund today (the end of a 15-year term). b. How much of this is interest? Leah deposited $15,000 into a fund at the beginning of every quarter for 10 years. He then stopped making deposits into the fund and allowed the investment to grow for 3 more years. The fund was growing at 5.72% compounded monthly. a. What was the accumulated value of the fund at the end of year 10? b. What was the accumulated value of the fund at the end of year 13? c. What is the total amount of interest earned over the 13-year period?
Since the birth of his daughter, 15 years ago, Natalie has deposited $180.00 at the beginning of every month into an RESP. The interest rate on the plan was 3.90% compounded monthly for the first 10 years and 5.00% compounded monthly for the next 5 years. a. Calculate the value of the fund today (the end of a 15-year term). b. How much of this is interest? Leah deposited $15,000 into a fund at the beginning of every quarter for 10 years. He then stopped making deposits into the fund and allowed the investment to grow for 3 more years. The fund was growing at 5.72% compounded monthly. a. What was the accumulated value of the fund at the end of year 10? b. What was the accumulated value of the fund at the end of year 13? c. What is the total amount of interest earned over the 13-year period?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 39P
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Since the birth of his daughter, 15 years ago, Natalie has deposited $180.00 at the beginning of every month into an RESP. The interest rate on the plan was 3.90% compounded monthly for the first 10 years and 5.00% compounded monthly for the next 5 years.
a. Calculate the value of the fund today (the end of a 15-year term).
b. How much of this is interest?
Leah deposited $15,000 into a fund at the beginning of every quarter for 10 years. He then stopped making deposits into the fund and allowed the investment to grow for 3 more years. The fund was growing at 5.72% compounded monthly.
a. What was the accumulated value of the fund at the end of year 10?
b. What was the accumulated value of the fund at the end of year 13?
c. What is the total amount of interest earned over the 13-year period?
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