Question

Emmanuel contributed $1,000 annually on New Year’s Eve to an IRA for the past 30 years. What is the approximate value now if his annual percentage rate was 8%?

a) $79,000
b) $62,000
c) $93,000
d) $100,000

Answer 1

The approximate value of Emmanuel's IRA after 30 years with an annual percentage rate of 8% is around $93,000.

Step-by-step explanation:

To find the approximate value of Emmanuel's IRA after 30 years with an annual percentage rate of 8%, we can use the formula for compound interest. The formula is:

A = P(1 + r/n)^(nt)

Where:

• A is the final amount in the IRA
• P is the initial amount contributed annually
• r is the annual percentage rate
• n is the number of times interest is compounded per year
• t is the number of years

Substituting in the given values, we have:

A = 1000(1 + 0.08/1)^(1*30)

A = 1000(1 + 0.08)^30

A ≈ $93,000

Therefore, the approximate value of Emmanuel's IRA now is around $93,000 (option c).