Question

on her 20th birthday, suizie invests $10,000 in an IRA(individual retirement account the earns 8 percent per year. She continues to invest %5,500 on each birthday for the next 48 years. how much money will she have at age 48?

Answer 1

FV of annuity
The formula for the future value of an ordinary annuity, as opposed to an annuity due, is as follows:
P = PMT x ((((1 + r) ^ n) - 1) / i)
Where:
P = the future value of an annuity stream
PMT = the dollar amount of each annuity payment
r = the effective interest rate (also known as the discount rate)
i=nominal Interest rate
n = the number of periods in which payments will be made
Amount after 28 years	= 5500* ((((1 + 8%) ^ 28) - 1) / 8%)
Amount after 28 years	524,363.56
Amount after 28 years for first investment	=10000*(1+8%)^28
Amount after 28 years for first investment	86,271.06
Total in account	86271.06+524363.56
Total in account	610,634.62