Question

Gabriel opened an RRSP deposit account on December 1, 2008, with a deposit of $1000. He added $1000 on October 1, 2010, and $1000 on April 1, 2012. How much is in his account on January 1, 2016, if the deposit earns 7.7% p.a. compounded monthly? The amount in the account is $ . (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Answer 1

Calculation of Number of Months between given dates: Dates are in ddmmyyy format From To No. of months 01-12-2008 01-10-2010 01-10-2010 01-04-2012 01-04-2012 01-01-2016 Rate of Interest = 7.7%p.a. 0.64% per month Interest = (Principal x (1 + r) (No. of Months)] - Principal Date Particulars Computation 01-12-2008 Initial Deposit 01-10-2010 Intersest upto date 1000 x (1 -0.006417)^(22) - 1000 01-10-2010 Deposit 01-04-2012 Intersest upto date 2151.11x( 1 + 0.006417)^(18) - 2151.11 01-04-2012 Deposit 01-01-2016 Intersest upto date 3413.6 x (1 +0.006417) (45) - 3413.6 Amount Amount $1,000.00 $151.11 $1.151.11 $1,000.00 $2.151.11 $262.49 $2,413.60 $1,000.00 $3,413.60 $1,138.60 $4,552.20| Balance in the account as on January 01, 2016 S4,552.20