1. ## Nominal Rate

Here the question that i hope to get some help on...

After 10½ years of contributions of $2,000 at the end of every six (6) months to an RRSP, the accumulated amount stood at$65,727.82. What semi-annually compounded nominal rate and equivalent compounded monthly rate of return were earned by the funds in the RRSP?

Using my calculator I got this far...
0 PV
21 N
-2,000 PMT
65,727.82 FV
COMP
I
4.2507

4.2507 would be the periodic monthly rate, correct?

thanks,

I is probably the "equivalent monthly compunded rate". You need to convert it to a semi-annual nominal rate using standard methods.

• Periodic is 4.251
• semi annaully compound nominal would be 4.25 x 2 = 8.502
• equivalent compounded monthly rate is 0.6689%

Am i in the ball park?

Thanks,

3. Anyone?

Thanks!

4. Originally Posted by petedam
• Periodic is 4.251
• semi annaully compound nominal would be 4.25 x 2 = 8.502
• equivalent compounded monthly rate is 0.6689%

Am i in the ball park?
No.
m = monthly cpd. rate:
(1 + m)^12 = 1.08502
1 + m = 1.08502^(1/12)
m = .006823.... or .6823%

5. Originally Posted by Wilmer
No.
m = monthly cpd. rate:
(1 + m)^12 = 1.08502
1 + m = 1.08502^(1/12)
m = .006823.... or .6823%
Thanks...I re- did and got 0.6823...not sure what happened the first time.

6. is that a spambot? i cant quite tell

7. Originally Posted by springfan25
is that a spambot? I cant quite tell
what?!

8. the post i was referring to has been deleted. I wasn't referring to your answer or any other post that is still in the thread