Pregunta
upstudy study bank question image url

At the age of 27 , to save for retirement, you decide to deposit \( \$ 70 \) at the end of each month in an IRA that pays \( 4 \% \) compounded monthly. a. Use the following formula to determine how much you will have in the IRA when you retire at age 65 . \[ A=\frac{P\left[(1+r)^{t}-1\right]}{r} \text { or } \] \[ A=\frac{P\left[\left(1+\frac{r}{n}\right)^{n t}-1\right]}{\left(\frac{r}{n}\right)} \] b. Find the interest.

Ask by Davey Patel. in the United States
Mar 16,2025

Solución de inteligencia artificial de Upstudy

Respuesta verificada por el tutor

Responder

After 38 years, the IRA will have approximately \$74,760. The interest earned is approximately \$42,840.

Solución

¡Inicia sesión para desbloquear respuestas gratis!

Una plataforma de aprendizaje en la que confían millones de estudiantes y profesores reales.

star-icon Descubrir

Respondido por UpStudy AI y revisado por un tutor profesional

Beyond the Answer

To determine how much you'll have in the IRA when you retire at age 65 using the given formula, let's plug in the numbers: 1. **Monthly Deposit (P):** $70 2. **Annual Interest Rate (r):** 4% or 0.04 3. **Months in a Year (n):** 12 4. **Total Investment Duration (t):** 65 - 27 = 38 years Now we can calculate \( A \): \[ A = \frac{70\left[\left(1+\frac{0.04}{12}\right)^{12 \times 38}-1\right]}{\left(\frac{0.04}{12}\right)} \] Calculating the components: - \( \frac{0.04}{12} = 0.003333 \) - \( 12 \times 38 = 456 \) - \( 1 + 0.003333 = 1.003333 \) - \( \left(1.003333\right)^{456} \approx 4.0688 \) Putting this all together: \[ A \approx \frac{70\left[4.0688-1\right]}{0.003333} \approx \frac{70 \times 3.0688}{0.003333} \approx \frac{214.816}{0.003333} \approx 64,445.15 \] So, you'll have about **$64,445.15** in the IRA when you retire at age 65. To find the interest earned, subtract the total contributions from the total amount in the IRA: - **Total Contributions:** \( 70 \times 12 \times 38 = 70 \times 456 = 31,920 \) - **Interest Earned:** \( 64,445.15 - 31,920 = 32,525.15 \) Therefore, the interest earned will be approximately **$32,525.15**.

preguntas relacionadas

2 QUESTION 1 : CONCEPTS,JOURNALS AND POSTING (78 marks; 70 Minutos) 1.1. CONCEPTS REQUIRED: Indicate whether the following statements are TRUE or FALSE. Write only 'true' or 'false' next to the question number (1.1.1-1.1.5). 1.1.1 Trading stock, bank and debtors are examples of non-current assets. (1) 1.1.2 A bank overdraft is a facility that allows the business to use more money than they have in their current banking account. (1) 1.1.3 Non-current liabilities are payable within a period of one year. 1.1.4 A creditor is a person or business that is owed money for goods or services they supplied on credit. 1.1.5 Equipment such as a cash register and printers are used to generate income for the business. 1.2 CASH JOURNALS JADE CREATIONS The following information was taken from the books of Jade Creations for March 2021. Jade Creations uses a mark-up of \( 60 \% \) for all merchandise sold. REQUIRED: 1.2.1 Complete the following Journals in the financial records of Jade Creations for March 2021: - Cash Receipts Journal - Cash Payments Journal 1.2.2 Post to the Bank Account in the General Ledger. Balance the account at the end of March 2021. Note: The opening balance is recorded in the answer book. RANSACTIONS FOR MARCH 2021 Paid Thato Suppliers for trading stock, R12 800 and stationery, R350 (EFT 190). Cash sales for the week amounted to R6 520 (CRR 01). Received an EFT 05 from R Rose for the rent for March 2021, R5 300. Invested R20 000 in a fixed deposit at UK Bank at an interest of \( 9 \% \) per annum, (EFT 191). Transferred weekly wages to the account of Sheila, R2 500, and EFT 192. Grade 10 Controlled test-Question paper 07 April 2021

Latest Economics Questions

¡Prueba Premium ahora!
¡Prueba Premium y hazle a Thoth AI preguntas de matemáticas ilimitadas ahora!
Quizas mas tarde Hazte Premium
Estudiar puede ser una verdadera lucha
¿Por qué no estudiarlo en UpStudy?
Seleccione su plan a continuación
Prima

Puedes disfrutar

Empieza ahora
  • Explicaciones paso a paso
  • Tutores expertos en vivo 24/7
  • Número ilimitado de preguntas
  • Sin interrupciones
  • Acceso completo a Respuesta y Solución
  • Acceso completo al chat de PDF, al chat de UpStudy y al chat de navegación
Básico

Totalmente gratis pero limitado

  • Solución limitada
Bienvenido a ¡Estudia ahora!
Inicie sesión para continuar con el recorrido de Thoth AI Chat
Continuar con correo electrónico
O continuar con
Al hacer clic en "Iniciar sesión", acepta nuestros términos y condiciones. Términos de Uso & Política de privacidad