Harlan made equal payments at the end of each month into his RRSP. If interest in his account is 8.3?% compounded quarterly?, and the balance after seven years is ?$13,500?, what is the size of the monthly ?payment?

 

119.3171501, or 119.32

Step-by-step explanation

Use the future value annuity formula and find for PMT.

FV = amount after seven years = 13,500

PMT = periodic payment = ?

n = number of payments = 7 x 12 = 84

rate = periodic rate = (1 + (0.083/4))^4/12 - 1 = 0.006869370366

FV = PMT x ((1+rate)ⁿ - 1) / rate

13,500 = PMT x ((1+0.006869370366)⁸⁴ - 1) / 0.006869370366

PMT = 13,500 / 113.1438355

PMT = 119.3171501, or 119.32