Question

How long will it take an RRSP to grow to $730,000, if it takes in month-end contribution of $1300 and earns: (Round up the number of contributions to the next integer.)

a.	4.3% compounded monthly?

    years,  month(s)

b.	6.5% compounded monthly?

    years,  month(s)

c.	8.3% compounded monthly?

    years,  month(s)

d.	9.3% compounded monthly?

    years,  month(s)

Answer 1

FV =730000
PMT =1300
a. Rate per month =4.3%/12
Number of months using financial calculator (by rounding to next integer)
I/Y =4.3%/12;PMT=1300;FV=-730000;CPT N=308.27
Time =25 years and 9 months

b. Rate per month =6.5%/12
Number of months using financial calculator
I/Y =6.5%/12;PMT=1300;FV=-730000;CPT N=278.51
Time =23 years and 3 months

c. Rate per month =8.3%/12
Number of months using financial calculator
I/Y =8.3%/12;PMT=1300;FV=-730000;CPT N=230.09
Time =19 years and 3 months

d. Rate per month =9.3%/12
Number of months using financial calculator
I/Y =9.3%/12;PMT=1300;FV=-730000;CPT N=217.28
Time =18 years and 2 months