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You are 24 years old and you have decided to deposit $5500 a year into an RRSP earning interest at i = 6.25% for the
You are 24 years old and you have decided to deposit $5500 a year into an RRSP earning interest at i = 6.25% for the first 15 years and i = 4.75% thereafter. You make your deposits at the beginning of each of the next 42 years (i.e. first deposit made today and final deposit made at age 65, one year before you plan to retire). Calculate the accumulated value of your deposits each year up to age 66 assuming (i) you pay no tax on the annual interest income (i.e. using an RRSP) (ii) you pay tax on the annual interest income at the marginal tax rate of 22% (i.e. saving your money outside of an RRSP) Show the accumulated value at the end of each year under both (i) and (ii). Graph your results Please show using excel and formulas
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