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A friend creates an IRA (Individual retirement account) with an APR of 6.25%. She starts the IRA at the age of 25 and deposits $50 at the end of each month. How much will her IRA contain when she retires
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A friend creates an IRA (Individual retirement account) with an APR of 6.25%. She starts the IRA at the age of 25 and deposits $50 at the end of each month. How much will her IRA contain when she retires at the age of 65?

User Snifff
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1 Answer

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65 - 25 = 40
so

A = [P (1 + i/n)^nt - 1 ] / (i/n)
A = [50 (1 + 0.0625 / 12)^12*40 - 1] / (0.0625 / 12)
A = $106,596

answer
$106,596
User ModernDesigner
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