Solve the problem.
-To save for retirement, Sue decides to deposit $1500 into an IRA at the end of each year for the next 30 years. If the interest rate is 7% per year compounded annually, find the value of the IRA after 30
Years. Round to the nearest dollar.
A) $2,814,804
B) $131,020
C) $141,691
D) $9918

Question

Quizplus · Accepted Answer

The value of the IRA after 30 years can be calculated using the formula for the future value of an annuity: $FV = P \times \frac{(1 + r)^n - 1}{r}$, where $P$ is the annual payment, $r$ is the annual interest rate, and $n$ is the number of payments. Plugging in the values given: $FV = 1500 \times \frac{(1 + 0.07)^{30} - 1}{0.07}$, which approximately equals $141,691 when rounded to the nearest dollar.

Solve the Problem. -To Save for Retirement, Sue Decides to Deposit $1500 into Deposit