Question

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 6%, compounded annually. (round your answer to the nearest cent.) $ 14656.4417 incorrect: your answer is incorrect.

Answer 1

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.