Question

You plan on retiring in 43 years. You expect the IRA to have an APR of 5.3%, compounded monthly. How much money will you have when you retire? Use $265.35 as the monthly amount.

Answer 1

Number of years is 43 years

rate per anum is 5.3%

Principal is $265.35

n is 12 month

t is 43 years

Using a compound interest formula

`A=P(1+(r)/(100n))^(nt)`
`A=265.35(1+(5.3)/(12*100))^(12*43)`
`A=265.35(1+0.004417)^(516)`
`\begin{gathered} A=265.35(1.004417)^(516) \\ =265.35*9.71968511 \\ =2579.12 \end{gathered}`

Hence, I will have $2579.12 when I retire