Question

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

Answer 1

FV= $137,440.62

Step-by-step 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