Question: Pascal has just agreed with his financial planner to begin voluntary accumulation plan. He will invest $500 at the end of every three months in a balanced mutual fund.
a) How much will the plan be worth after 20 years if the mutual fund earns 8% compounded quarterly? (4 marks)
b) If Pascal does not make any more quarterly payments but leaves the money in the fund for another 30 years, how much will he have accumulated at the end of 50 years, assuming the interest rate does not change? (3 marks)