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Bob makes his first $600 deposit into an IRA earning 7.6% compounded annually on his 24th birthday and his last $600 deposit

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Answer #1

FV of Annuity(35th birthday) = Annual Deposit * [{(1 + r)n - 1} / r]

= $600 * [{(1 + 0.076)12 - 1} / 0.076]

= $600 * [1.4085 / 0.076]

= $600 * 18.5329 = $11,119.76

Value of Fund(at retirement) = FV of Annuity(35th birthday) * (1 + r)n

= $11,119.76 * (1 + 0.076)(65-35)

= $11,119.76 * 9.0026

= $100,106.82

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