Question

A) Patty Stacey deposits $2600 at the end of each of 5 years in an IRA. If she leaves the money that has accumulated in the IRA account for 25 additional years, how much is in her account at the end of the 30-year period? Assume an interest rate of 10%, compounded annually. (Round your answer to the nearest cent.)
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(b) Suppose that Patty's husband delays starting an IRA for the first 10 years he works but then makes $2600 deposits at the end of each of the next 15 years. If the interest rate is 10%, compounded annually, and if he leaves the money in his account for 5 additional years, how much will be in his account at the end of the 30-year period? (Round your answer to the nearest cent.)
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(c) Does Patty or her husband have more IRA money?

Answer 1

Answer:

From the question, Stacey deposits $2600 six times over a thirty year period since she makes the deposit every five years. Her amount accures by the formular. A = P(1+r/n)^nt. Where her principal P = $2,600. Rate, r =6% =0.06. Time = 30 years and the period of compounding per unit time, n = 6 years. So we have A =2, 600(1+(0.06/6))^(6*30) = 2, 600 (1 + 0.01)^(180) = 2600* 5.9958 = $15, 587. To the nearest cent we have $15, 590.

Step-by-step explanation:

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