Lynne is 25 years old and starting and IRA (individual retirement account). She is going to invest $150 at the beginning of each month. The account is expected to earn %5.5 interest, compounded monthly. How much money rounded to the nearest dollar will lynne have in her IRA if she wants to retire at age 65

Question

Mathematics

Prego

12 June, 05:21

Lynne is 25 years old and starting and IRA (individual retirement account). She is going to invest $150 at the beginning of each month. The account is expected to earn %5.5 interest, compounded monthly. How much money rounded to the nearest dollar will lynne have in her IRA if she wants to retire at age 65

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Lucy · Answer 1

The future amount of Lynnes retirement account can be computed using the formula of amortization or annuity:

P = A[ (1+i) ^n-1) ] / (i)

A = amortization

i = 5.5%

n = 40*12 = 480

Subsituting the variables in th formula, Future amount of Lynne in 40 years is equal to

P = $29,082.71