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Mr
Mr. Nowak has contributed ?$106.00 at the end of each month into an RRSP paying 3% per annum compounded annually.
How much will Mr. Nowak have in the RRSP after 15 ?years?
?$
?(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as? needed.)
How much of the above amount is? interest?
?$
?(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as? needed.)
Expert Solution
1) Computation of Accumulated Amount after 15 Years using FV Function in Excel:
=-fv(rate,nper,pmt,pv)
Here,
FV = Accumulated Amount = ?
Rate = 3%/12 = 0.25% compound monthly
Nper = 15 years * 12 months = 180 months
PMT = $106
PV = 0
Substituting the values in formula:
=-fv(0.25%,180,106,0)
FV or Accumulated Amount after 15 Years = $24,059.11
Computation of Amount of Interest:
Amount of Interest = Accumulated Amount after 15 Years - Total Payment
= $24,059.11 - ($106*15*12)
= $24,059.11 - $19,080
Amount of Interest = $4,979.11
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