Question

You deposit $ 755 each month into an IRA earning 1.3 % interest compounded monthly

How much will you have in the account in 23 years?

Answer 1

FV= $242,731.14

Explanation:

Giving the following information:

Annual investment (A)= $755

Number of periods (n)= 23*12= 276 months

Interest rate (i)= 0.013/12= 0.0010833

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

FV= {755*[(1.0010833^276) - 1]} / 0.0010833

FV= $242,731.14