Question

At age 23​, someone sets up an IRA​ (individual retirement​ account) with an APR of 8​%. At the end of each month he deposits ​$35 in the account. How much will the IRA contain when he retires at age​ 65? Compare that amount to the total deposits made over the time period

Answer 1

Answer:

FV= $146,002.59

Step-by-step explanation:

Giving the following information:

Monthly deposit= $35

Number of periods= (65 - 23)*12= 504 months

Interest rate= 0.08/12= 0.0067

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

FV= {35*[(1.0067^504) - 1]} / 0.0067

FV= $146,002.59