Dr. Collins wants the value of her RRSP 30 years from now to have the purchasing power of $500,000 in current dollars.
a) Assuming an inflation rate of 2% per year, what nominal dollar amount should Dr. Collins have in her RRSP after 30 years?
b) Assuming her RRSP will earn 8.5% compounded semi-annually, what contributions should she make at the end of every three months to achieve the goal?

Question

Quizplus · Accepted Answer

The Answer of Dr. Collins wants the value of her RRSP 30 years from now to have the purchasing power of $500,000 in current dollars.
a) Assuming an inflation rate of 2% per year, what nominal dollar amount should Dr. Collins have in her RRSP after 30 years?
b) Assuming her RRSP will earn 8.5% compounded semi-annually, what contributions should she make at the end of every three months to achieve the goal?

Dr Collins Wants the Value of Her RRSP 30 Years