Solve.
-To save for retirement, you decide to deposit $2,500 into an IRA at the end of each year for the next 30years. 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)$236,152
B)$16,531
C)$218,366
D)$4,691,339

Question

Quizplus · Accepted Answer

The value of the IRA after 30 years can be calculated using the future value of an annuity formula: FV = P * [((1 + r)^n - 1) / r], where P is the annual payment ($2,500), r is the annual interest rate (7% or 0.07), and n is the number of payments (30 years). Plugging in the values, we get FV = $2,500 * [((1 + 0.07)^30 - 1) / 0.07], which rounds to approximately $236,152.

Solve. -To Save for Retirement, You Decide to Deposit $2,500 into into an IRA