at age 25 you set up an IRA of 5% (compounded monthly). Each month you deposit $75 into the account. What will the accumulated balance of the IRA be when you retire at 65?
This is the formula you would use to find the FV of the IRA at 65.
FV=P{[1 + R]^N - 1/ R}
FV =$75 x {[1 + 0.05/12]^(40*12) - 1 / (0.05/12)}
FV =$114,451.51 - This is what you would have in your IRA at 65.
P.S. Do the math in the above formula and see if you can get the same answer that I did.
