Question

At age 20, someone sets up an IRA (individual retirement account) with an APR of 5%. At the end of each month he deposits $65 in the account. How much will the IRA contain when

←he
retires at age 65? Compare that amount to the total deposits made over the time period.
After retirement the IRA will contain $ 131,718.42
(Do not round until the final answer. Then round to the nearest cent as needed.)
The total deposits made over the time period is $
(Type a whole number)
CETT

Answer 1

total deposits: $35,100

Explanation:

You have the value of an annuity earning 5% with payments of $65 a month for 45 years as $131,718.42. You want to know the total value of payments.

Payments

12 payments per year of $65 for 45 years will have a total value of ...

12·65·45 = 35100

Total deposits will be $35,100.