Foundations for College Mathematics MAP4C-B Workbook Unit II 12 3. You decide to save for your child's education. You will invest \( \$ 150 / \) month until the child's \( 18^{\text {th }} \) birthday. [10 marks] a) How much will you have after 18 years if interest averages \( 7 \% \) compounded monthly in a non-RESP investment? b) If this were an RESP, the government would contribute \( 20 \% \), in effect creating a larger monthly investment. What would the new payment be including this extra \( 20 \% \) ? c) How much more will be earned after 18 years by choosing the RESP option at the same interest rate?
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The formula for the future value of a series of monthly payments is: FV = P * [(1 + r/n)^(nt) - 1] / (r/n) where: FV = future value P = monthly payment r = annual interest rate (in decimal form) n = number of times interest is compounded per year t = number of Show more…
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