Mr. Braun wants the value of his RRSP 25 years from now to have the purchasing power of $400,000 in current dollars.
a) Assuming an inflation rate of 4% per year, what nominal dollar amount should Mr. Braun have in his RRSP after 25 years?
b) What contributions should he make at the end of every three months to achieve the goal if his RRSP earns 7.5% compounded semiannually?

Question

Quizplus · Accepted Answer

The Answer of Mr. Braun wants the value of his RRSP 25 years from now to have the purchasing power of $400,000 in current dollars.
a) Assuming an inflation rate of 4% per year, what nominal dollar amount should Mr. Braun have in his RRSP after 25 years?
b) What contributions should he make at the end of every three months to achieve the goal if his RRSP earns 7.5% compounded semiannually?

Mr Braun Wants the Value of His RRSP 25 Years