Question

Morgan made equal deposits at the beginning of every 3 months into an RRSP. At the end of 8 years, the fund had an accumulated value of \( \$ 50,000 \). If the RRSP was earning \( 2.75 \% \) compounde

Answer 1

Morgan made approximately $39,056.61 in equal deposits at the beginning of every 3 months into the RRSP.

Step-by-step explanation:

In order to determine the equal deposits made by Morgan at the beginning of every 3 months, you need to use the formula for compound interest. The formula is A = P(1 + r/n)^(nt), where A is the accumulated value, P is the principal (the deposit amount), r is the interest rate (2.75% in this case), n is the number of times interest is compounded per year (4 times per year in this case), and t is the number of years (8 years in this case).

Since Morgan's deposits were made at the beginning of every 3 months, n would be 4 (quarterly compounding).

Using the formula, we can solve for P:

$50,000 = P(1 + 0.0275/4)^(4*8)

Dividing both sides of the equation by (1 + 0.0275/4)^(4*8) and solving for P:

P ≈ $50,000 / (1 + 0.0275/4)^(4*8) ≈ $50,000 / 1.280084674 ≈ $39,056.61

Therefore, Morgan made approximately $39,056.61 in equal deposits at the beginning of every 3 months into the RRSP.