Sparky will invest $7,500 into his RRSP at the end of each year for 30 years. How much more money will he have in 30 years if he is able to earn 13% compounded annually rather than 11% compounded annually?
A) $149,266
B) $219,899
C) $304,261
D) $589,114
E) $706,338

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used to calculate the total amount of money accumulated after making regular deposits. The formula is FV = P * [(1 + r)^n - 1] / r, where P is the annual deposit, r is the interest rate, and n is the number of years. Calculating for both 13% and 11% and finding the difference gives $706,338.

Sparky Will Invest $7,500 into His RRSP at the End