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Ted deposited​ $1750 in an RRSP on March​ 1, 2014, at​ 3% compounded quarterly. Subsequently the...

Ted deposited​ $1750 in an RRSP on March​ 1, 2014, at​ 3% compounded quarterly. Subsequently the interest rate was changed to​ 4% compounded monthly on September​ 1, 2016, and to​ 4.5% compounded​ semi-annually on June​ 1, 2018. What was the value of the RRSP deposit on December​ 1, 2020, if no further changes in interest were​ made?

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Answer #1

Value on Sep1,2016 = Deposit on Mar1,2014 * (1+r)^n

= $ 1750 * ( 1 + 0.0075)^10

= $ 1750 ( 1.0075^10)

= $ 1750 (1.0776)

= $ 808.19

Value on June1,2018 = Value on Se1,2016 * ( 1 + r)^n

= $ 808.19 * ( 1 + 0.003333)^21

= $ 808.19 * ( 1.003333)^21

= $ 808.19 * 1.0724

= $ 866.69

Value on Dec1,2020 = Value on June1,2018 * ( 1 + r)^n

= $ 866.69 * ( 1 + 0.0225)^5

= $ 866.69 * ( 1.0225)^5

= $ 866.69 * 1.1177

= $ 968.68

Pls do rate, if the answer is correct and comment, if any further assistance is required

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