Homework Help: mathmodeling

Posted by fazilah on Thursday, August 18, 2011 at 4:33am.

Person A opens an IRA at age 25, contributes $2000 per year for 10 years, but makes no additional contributions
thereafter. Person B waits until age 35 to open an IRA and contributes $2000 per years for 30 years. There is
no initial investment in either case.

a) Assuming an interest rate of 8%, what is the balance in each IRA at age 65?

mathmodeling - Reiny, Thursday, August 18, 2011 at 7:44am
person A
amount = 2000(1.08^10 - 1)/.08 * 1.08^30 = 291 546.62

person B
amount = 2000(1.08^30 - 1)/.08 = 226 566.42

Answer this Question

Related Questions

mathematical modeling - Person A opens an IRA at age 25, contributes $2000 per ...
math modeling - Person A opens an IRA at age 25, contributes $2000 per year for ...
Finance - A 46-year-old man deposits a total of $2000 per period in an IRA until...
Math/Radioactive Dating - My teacher said that if the ratio of mass (in a rock) ...
Math - If you put $5,000/ year into an IRA and get 4% per year, what would you ...
finance - Suppose that you are 25 years old and you have two options to save ...
math - a person invests $2000 at 4% per year comoundes semi-annually for 25 ...
Finance - Ambrin Corp. expects to receive $2,000 per year for 10 years and $3,...
Advanced Functions - Rena has been offered entry-level positions with two firms...
math - suppose you deposited $3000 of earned income into an IRA, you canearn an ...

For Further Reading

First Name:
School Subject:
Answer: