Lori Opened a Savings Account Five Years Ago

question 36

True/False

Lori opened a savings account five years ago. Her initial investment was $2,000. Today, she decided to close the account by withdrawing all of the money in her account. The total balance was $3,125.
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The total amount of interest compounded over the five years was $1,125.​

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Definitions:

RRSP

Registered Retirement Savings Plan, a Canadian account for holding savings and investment assets with tax benefits for retirement.

Deposits

Funds placed into an account at a financial institution for safekeeping or to earn interest.

Compounded Monthly

An interest calculation method where interest is added to the principal balance on a monthly basis, resulting in interest being earned on top of interest.

Monthly Payments

payments made once a month toward a loan or other financial obligation.