SOLUTION: Suppose that at age 25 you decide to save for retirement by depositing $50 at the end of each month in an IRA that pays 5.5% compound monthly. A How much will you have from the IR

Question 1039606: Suppose that at age 25 you decide to save for retirement by depositing $50 at the end of each month in an IRA that pays 5.5% compound monthly.
A How much will you have from the IRA when you retire at age 65?
B Find the interest.
Found 2 solutions by addingup, Alan3354:
Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
Age 25 and planning to retire at 65 = 40 years of savings.
Interest:0.055
Savings: 50
:
PMT*(((1+r/n)^nt-1)/(r/n))= Amount
50*((1+0.055/12)^(12*40)-1)/(0.055/12)
50*(7.9798/0.00458) = Amount
50*1742.31 = 87,115.50 This is how much you will have at the end of 40 years. Great example of the power of compounding.
John
Answer by Alan3354(69443) (Show Source): You can put this solution on YOUR website!
That's enough to survive 2 years, maybe 3.
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