Answered

Welcome to Westonci.ca, where your questions are met with accurate answers from a community of experts and enthusiasts. Explore thousands of questions and answers from a knowledgeable community of experts ready to help you find solutions. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

A Roth Individual Retirement Account allows you to draw a fixed amount that is not taxed. The maximum amount that an individual can contribute annually to a Roth IRA is $5,000. Determine the future value of such an account given that the annual percent rate is 1. 2%, and an annual payment of $2,675. 32 is made at the end of each year for 30 years. Round to the nearest cent. A. $95,245. 67 b. $95,340. 91 c. $97,074. 97 d. $95,923. 88.

Sagot :

Since the deposit is made at the end of each year, the relevant formula to use is the formula for calculating the Future Value (FV) of an Ordinary Annuity stated as follows:

FV = M * (((1 + r)^n - 1) / r) ................................. (1)

Where:

FV = Future value after 30 years = ?

M = Annual payment = $2,675.32

r = Annual interest rate = 1.2%, or 0.012

n = Number of years = 30

Substituting the values into equation (1), we have:

FV = $2,675.32 * (((1 + 0.012)^30 - 1) / 0.012)  

FV = $2,675.32 * 35.8551048895342

FV = $95,923.88

Therefore, the future value of such an account d. $95,923. 88.

Learn more here: https://brainly.com/question/5303391.

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. We're glad you chose Westonci.ca. Revisit us for updated answers from our knowledgeable team.