How Much Longer Will It Take Month-End RRSP Contributions of $500

question 37

Short Answer

How much longer will it take month-end RRSP contributions of $500 to accumulate $500,000 than month-end contributions of $550? Assume that the RRSP earns 3.75% compounded monthly. Round the time required in each case to the next higher month.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered or altered, not affecting future business decisions.

Capital Budgeting

Capital budgeting is the process by which a business evaluates and selects long-term investments based on their potential to generate profitable returns over time.

After Tax Cash Flow

The amount of cash that a business or individual has available after all tax obligations have been paid, indicating the net cash generated or used over a period.

Depreciated

The decrease in the value of an asset over time, often due to wear and tear or obsolescence.