Question

Jake Werkheiser decides to invest $5000 in an IRA at the end of each year for the next 12 years. If he makes these investments, and if the certificates pay 9%, compounded annually, how much will he have at the end of the 12 years?

Answer 1

Answer:

Jake Werkheiser will have $170,322.48 at the end of 12 years.

Explanation:

We use the following formula to find the future value,

$S=R[\frac{(1+i)^n-1}{i}](1+i)$

S= future value

R= yearly payment =$5000

i= rate of interest = 9%=0.09

n =time =12 years.

Now putting the value of i, n, R

$S=5000[\frac{(1+0.09)^{12}-1}{0.09}](1+0.09)$

 =$170,322.48

Jake Werkheiser will have $170,322.48 at the end of 12 years.