1. ## need urgently...finance math

1) If the cost of long term care is increasing at 7 percent a year, what will be the approximate monthly cost for Fran's mother eight years from now?

2) Fran and Ed plan to deposit $1500 a year to thier RRSP's fpr 35 years. If they earn an average annual return of 9 percent, what will be the value of their RRSP's after 35 years? I know the answers to the above questions but I just don't know what formulas to use for both of them. Can someone please tell me the formulas that I should use for each of the above questions. And I'll post the work + answers that I get for both of them just to verify. 2. ## Re: need urgently...finance math These problems use the formula for compound interest which is $\displaystyle A = P\left(1+ \frac{r}{100}\right)^t$ Originally Posted by perron 1) If the cost of long term care is increasing at 7 percent a year, what will be the approximate monthly cost for Fran's mother eight years from now? Let x be the annual cost of long term care, with a 7% increase per year over eight years the monthly cost will be $\frac{1.07^8\times x}{12}$ Originally Posted by perron 2) Fran and Ed plan to deposit$1500 a year to thier RRSP's fpr 35 years. If they earn an average annual return of 9 percent, what will be the value of their RRSP's after 35 years?

Similar to the first question, the total value will be $1.09^{35}\times 1500$

3. ## Re: need urgently...finance math

Originally Posted by perron
2) Fran and Ed plan to deposit \$1500 a year to thier RRSP's fpr 35 years. If they earn an average annual return of 9 percent, what will be the value of their RRSP's after 35 years?
1500(1.09^35 - 1) / .09 = 323566.132...