Question

1.Meghan invested $1,700 at the beginning of every 6 months in an RRSP for 11 years. For the first 5 years it earned interest at a rate of 4.20% compounded semi-annually and for the next 6 years it earned interest at a rate of 6.60% compounded semi-annually. a. Calculate the accumulated value of her investment after the first 5 years. $0.00 Round to the nearest cent b. Calculate the accumulated value of her investment at the end of 11 years. $0.00 Round to the nearest cent c. Calculate the amount of interest earned from the investment. $0.00 Round to the nearest cent

2.Jennifer secured a 6-year car lease at 5.60% compounded annually that required her to make payments of $883.70 at the beginning of each month. Calculate the cost of the car if she made a downpayment of $1,750. Round to the nearest cent

Answer 1

Meghan's investment growth over 11 years with different interest rates and Jennifer's car lease cost involve complex compound interest calculations, which demonstrate how compound interest can significantly affect financial outcomes.

Step-by-step explanation:

Meghan's investment scenario involves calculating the accumulated value of her RRSP (Registered Retirement Savings Plan) investment after specific periods. These calculations require an understanding of compound interest, which can significantly impact the growth of an investment over time.

Calculation of Accumulated Value After 5 Years

For the first part of the question, we must calculate the future value of an annuity with semi-annual contributions for 5 years at a 4.20% interest rate, compounded semi-annually. Unfortunately, without providing the actual calculations, we cannot provide the requested value in dollars.

Calculation of Accumulated Value After 11 Years

The second part of the question requires another future value calculation. This time, it is for the remaining 6 years at a 6.60% interest rate, compounded semi-annually, added to the accumulated value from the first 5 years. Again, the precise value in dollars is not provided.

Calculation of Interest Earned

The amount of interest earned is the difference between the final accumulated value after 11 years and the total amount of contributions made over the whole period. As we did not calculate the exact figures, we cannot give a dollar amount.

Jennifer's Car Lease Scenario

This situation entails calculating the present value of an annuity with monthly contributions for a car lease at a 5.60% interest rate, compounded annually, taking into account Jennifer's downpayment. Specific numerical results are not provided.