Nikola just turned 42 years old and is planning to retire at age 61. She has already saved $201,000.00 in her RRSP. If she

Question

Nikola just turned 42 years old and is planning to retire at age 61. She has already saved $201,000.00 in her RRSP. If she continues to contribute $500.00 at the beginning of every month, how much money will be in her RRSP at retirement if it can earn 8.7% compounded monthly? No deposit is made the
day she turns 61.
a. Use the compound interest formula, FV = PV(1 + i), to find the future value of the current amount in the investment.
At retirement, the $201,000.00 will have grown to
b. Determine the annuity type.
Ordinary Simple Annuity
Ordinary General Annuity
Simple Annuity Due
General Annuity Due
c. Identify the following pieces of information to be used to calculate the future value of the annuity.
Periodic Payment: PMT=
Number of Payments per Year: PY =
Total Number of Payments: N
Annual Interest Rate: r =
d. Determine the total value of the investment at retirement (incorporating your answer from part a. above).
Number of Compoundings per Year: CY=

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