Question

at the age of 34, you decide to deposit $70 at the end of each month in an IRA that pays 6.5% compounded monthly

Answer 1

Using the future value formula, the amount that will be in the account after 30 years is $77,432.47.

Formula

`FV=PV(1+r)^(n)`

FV = future value

PV = present value

r = annual interest rate

{n} = number of periods interest held

Online finance calculator:

N (# of periods) = 360 months (30 years x 12)

I/Y (Interest per year) = 6.5%

PV (Present Value) = $0

PMT (Periodic Payment) = $70

Results:

FV (Future Value) = $77,432.47

Sum of all periodic payments = $25,200.00

Total Interest = $52,232.47

Complete Question:

At the age of 34, you decide to deposit $70 at the end of each month in an IRA that pays 6.5% compounded monthly. What is the future when you turn 64?