The NET @ssets feature at the beginning of this section describes how to access the Constant-Growth Annuity
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The NET @ssets feature at the beginning of this section describes how to access the Constant-Growth Annuity Chart available in this textbook’s Web site. Use this chart to answer the following questions. Assume in every case that you make annual end-of-year contributions to an RRSP for 25 years. The RRSP earns 7.5% compounded annually. Compared to a “base case” of constant contributions of $3000, how much larger (in percentage terms) will the value of your RRSP be after 25 years if you increase the payments by: a. 1% per year? b. 2% per year? c. 4% per year?
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With PMT 3000per year for 25 years and j 75 compounded annually fu...View the full answer
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