Suppose you begin saving for your retirement by depositing $5,000 per year in an IRA. The...
Suppose you begin saving for your retirement by depositing $5,000 per year in an IRA. The interest rate earned is 3%. If you make 20 payments at the end of each year how much will you have in the future?
Homework Answers
Future value of annuity=Annuity[(1+rate)^time period-1]/rate
=5000[(1.03)^20-1]/0.03
=5000*26.8703745
=$134351.87(Approx).
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