You Want to Accumulate $2,500,000 in Your RRSP by Your

question 113

Multiple Choice

You want to accumulate $2,500,000 in your RRSP by your retirement date,which is 35 years from now.You will make 30 deposits into your plan,with the first deposit occurring today.The plan's rate of return typically averages 9%.You expect to increase each deposit by 2% as your income grows with inflation.(That is,your second deposit will be 2% greater than your first,the third will be 2% greater than the second,etc.) How much must your first deposit at t = 0 be to enable you to meet your goal?

• A)$8,718.90
• B)$9,154.84
• C)$9,612.58
• D)$10,093.21

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