Ralph wants to know what he should be able to save in his child's RESP account if he contributes $2,500 per year and also gets the CES grant of $500 each year.He wants to assume a conservative investment return of four percent annual return and that he will only contribute until the child is 15 (assume 15 years of $3000 deposits).
A)$46 500
B)$52 200
C)$65 500
D)$60 700

Question

Quizplus · Accepted Answer

Ralph contributes $2,500 annually and receives a $500 CES grant, totaling $3,000 per year for 15 years. Using the future value of an annuity formula with a 4% annual return, the calculation is: FV = $3,000 * [(1 + 0.04)^15 - 1] / 0.04, which results in approximately $60,700.

Ralph Wants to Know What He Should Be Able to Save