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 May 10th, 2019, 02:03 PM #1 Member   Joined: Jan 2019 From: tornto Posts: 36 Thanks: 0 investment You and your spouse have just welcomed your first child. You realize you need to start saving for his education. You decide that you will begin investing 100/month into an RESP until his 18th birthday. Use your calculator's tvm solver answer A) Assuming you can earn an average 7% on your investment (compounded monthly) how much will the RESP be worth on the 18th birthday? Future Balance $43,679 b) With an RESP investment the government contribute 20% of what you invest directly into your RESP fund. If this 20% is added to your monthly investment, how much is really invested every month? c) Use this new monthly amount to determine the value of the RESP on your son's 18th birthday. How much more was earned with the government's 20% contribution? d) You decide to start a second RESP when your daughter is born and again invest 100/month up to her 18th birthday. It is expected that you will be able to earn an average of 7,4% compounded monthly on this investment. Calculate the total amount of this RESP using just you monthly investment and compare this to the amount it would be if you consider the 20% government contribution. Please help. Thanks. Last edited by skipjack; May 10th, 2019 at 10:40 PM.  May 10th, 2019, 10:59 PM #2 Global Moderator Joined: Dec 2006 Posts: 20,623 Thanks: 2076 Is$43,679 your answer or the expected answer?
 May 11th, 2019, 09:54 PM #3 Member   Joined: Jan 2019 From: tornto Posts: 36 Thanks: 0 no i did calculation and 43072.10266 for question 2) really no clue how to solve it thanks
 May 11th, 2019, 11:44 PM #4 Global Moderator   Joined: Dec 2006 Posts: 20,623 Thanks: 2076 I got 43323 by repeatedly calculating the end-of-month value of the RESP. How did you get 43072 and what were you referring to as "question 2)"?
May 12th, 2019, 01:56 PM   #5
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Joined: Jan 2019
From: tornto

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Quote:
 Originally Posted by skipjack I got 43323 by repeatedly calculating the end-of-month value of the RESP. How did you get 43072 and what were you referring to as "question 2)"?

N = 216 (= 18*12)
I% = 7
PV = 0
PMT = 100
FV = 43072.10266
P/Y = 12
C/Y = 12

sorry b) no clue how to solve

 May 12th, 2019, 06:07 PM #6 Global Moderator   Joined: Dec 2006 Posts: 20,623 Thanks: 2076 How was FV = 43072.10266 obtained? The wording of part (b) could be clearer, but I think it means that 120 is invested monthly.
 May 12th, 2019, 09:57 PM #7 Member   Joined: Jan 2019 From: tornto Posts: 36 Thanks: 0 The question asked for using TVM CALCULATORS STILL B) NO CLUE
 May 13th, 2019, 11:55 PM #8 Member   Joined: Jan 2019 From: tornto Posts: 36 Thanks: 0 a N = 216 (= 18*12) I% = 7 PV = 0 PMT = 100 FV = 43072.10266 P/Y = 12 C/Y = 12 b) 100*20%= 20 c) 100+20=120 216 7% tvm solver gives 51686.52 d) no clue? please correct if i am wrong

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