Question: Jane s parents save 1 000 per year for 17 years to

Jane’s parents save $1,000 per year for 17 years to pay for her university tuition costs. They deposit the money into a Registered Education Savings Plan (RESP) account so that no tax is payable on the interest income. This RESP account provides a return of 6 percent per year.
a. How much will Jane’s account be worth when she begins her university studies?
b. As an incentive to save for higher education, the government will add 20 percent to any money contributed to an RESP each year. Including these grants, how much will Jane have in her account?

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  • CreatedFebruary 25, 2015
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