g 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. How much is in the IRA when Bob retires

Question

Business

Madalynn

22 May, 03:52

g 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. How much is in the IRA when Bob retires

+3

Answers (1)

Know the Answer?

Davion Turner · Answer 1

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