5.) Raj wants to make annual contributions to his RRSP for the next 30 years. He...

Question

Question

5.) Raj wants to make annual contributions to his RRSP for the next 30 years. He will increase each annual payment by 3.5%, a

Answer 1

Answer #1

Growing annuity:

b - 1 I_(6+1) – ult+1)]* 7W= AA

PMT 350, 000 = . * [(1 + 0.103) 30 - (1 + 0.035) 30 0.103 -0,035 11

350,000 = PMT * 16.1282090747 0,068

350,000 = PMT * 237.1795452162

PMT = 350,000 237.1795452162

PMT = 1, 475.6753145848

This is the first payment one year from now.

The amount of Raj's first payment today = 1,475.6753145848/(1 + 0.103)

The amount of Raj's first payment today = $1,337.8742652627

Can you please upvote? Thank You :-)

Answer 2

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