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?

Guest Oct 19, 2017

#1**+1 **

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.

Guest Oct 19, 2017