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 made at the end of the year).
A)$46 500
B)$52 200
C)$65 500
D)$60 700

Question

Quizplus · Accepted Answer

The total amount saved in the RESP account can be calculated using the future value of an annuity formula, which is FV = P * [((1 + r)^n - 1) / r], where P is the annual payment ($3,000), r is the annual interest rate (0.04), and n is the number of payments (15). Plugging in these values gives FV = $3000 * [((1 + 0.04)^15 - 1) / 0.04], which calculates to approximately $60,700.

Ralph Wants to Know What He Should Be Able to Save