Question

Rosalia White will invest $3.351 in an IRA for the next 11 years starting at the end of this year. The investment will eam 6 percent annually. How much will she have at the end of 11 years? (Round to the nearest two dollars if needed. Do not type the $ symbol)

Answer 1

Using the future value formula for an annuity, Rosalia White will have approximately $44,160 at the end of 11 years by investing $3,351 annually at a 6% interest rate.

Step-by-step explanation:

The student's question is about determining the future value of an investment in an Individual Retirement Account (IRA) with a specified annual rate of return. To answer the question for Rosalia White who will invest $3,351 annually for 11 years at an interest rate of 6% annually, we can use the formula for the future value of a series of equal payments (an annuity). The formula is:

FV = Pmt × `(((1 + r)^n - 1) / r)`, where:

• FV is the future value of the annuity,
• Pmt is the annual payment,
• r is the annual interest rate (expressed as a decimal), and
• n is the number of periods.

Plugging in the values, we get:

FV = 3,351 × `(((1 + 0.06)^11 - 1) / 0.06)`

After performing the calculations:

FV = 3,351 × 13.180818168

Future Value = $44,160.34

Therefore, Rosalia White will have approximately $44,160 at the end of 11 years if she invests $3,351 annually at an interest rate of 6%.