g Bob makes his first $ 800 deposit into an IRA earning 7.4 % compounded annually on his 24th birthday and his last $ 800 deposi

Question

3 years ago

7

g Bob makes his first $ 800 deposit into an IRA earning 7.4 % compounded annually on his 24th birthday and his last $ 800 deposi

t on his 39th birthday (16 equal deposits in all). With no additional deposits, the money in the IRA continues to earn 7.4 % interest compounded annually until Iob retirees on his 65th birthday. How much is in the IRA when Bob retires

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1 answer:

Gala2k [10] · Answer 1 · 2022-03-13T17:53:24+03:00

Answer:

FV= $137,440.62

Explanation:

Giving the following information:

Bob makes his first $ 800 deposit into an IRA earning 7.4 % compounded annually on his 24th birthday and his last $ 800 deposit on his 39th birthday (16 equal deposits in all). With no additional deposits, the money in the IRA continues to earn 7.4 % interest compounded annually until Iob retirees on his 65th birthday.

First, 16 years:

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

A= annual deposit

FV= {800*[(1.074^16)-1]}/0,074= $23,067.90

Next 25 years.

FV= PV*(1+i)^n

FV= 23,067.90*(1.074)^25= $137,440.62