Romeo started an RRSP on March 1, 2016, with a deposit of $35 000.00. She added $19 000.00 on December 1, 2017, and $8500.00 on September 1, 2018. What is the accumulated value of her account on December 1, 2020, if interest is 6.6% compounded monthly?
A) $39272.78
B) $41260.10
C) $47846.07
D) $70993.80
E) $80850.58

Question

Quizplus · Accepted Answer

The accumulated value is calculated using the future value formula for compound interest for each deposit separately and then summing them up. The calculations are as follows:  1. For the initial deposit of $35,000 from March 1, 2016, to December 1, 2020 (57 months):     FV = 35000 * (1 + 0.066/12)^(57)  2. For the deposit of $19,000 from December 1, 2017, to December 1, 2020 (36 months):     FV = 19000 * (1 + 0.066/12)^(36)  3. For the deposit of $8,500 from September 1, 2018, to December 1, 2020 (27 months):     FV = 8500 * (1 + 0.066/12)^(27)  Adding these future values gives the total accumulated value, which matches option E.

Romeo Started an RRSP on March 1, 2016, with a Deposit