document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1136750>Question 1136750</A>: <I><SPAN STYLE=\"word-break: break-all;\"> AT AGE 25, TO SAVE FOR RETIREMENT, YOU DECIDE TO DEPOSIT $75 INTO AN IRA AT THE END OF EACH MONTH AT AN INTEREST RATE OF 6.5% PER YEAR COMPOUNDED DAILY. HOW MUCH WILL YOU HAVE FROM THE IRA WHEN YOU RETIRE AT AGE 65? FIND THE INTEREST. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #754570 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=754570\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> if you meant compounded monthly, it's pretty straight forward with the use of a financial calculator.\r<BR>\n" );
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document.write( "if you meant compounded daily, it becomes more complex, but can still be done.\r<BR>\n" );
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document.write( "first i'll do compounded monthly.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2019/031502.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "next i'll do compounded daily.\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2019/031503.jpg\" alt=\"$$$\" >\r<BR>\n" );
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document.write( "the interest is the future value minus the sum of the payments.\r<BR>\n" );
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document.write( "480 * 70 = total payments of 33,600.\r<BR>\n" );
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document.write( "with monthly compounding, the interest is the future value minus the sum of the payments = 159,853.32 - 33,600 = 126,253.32.\r<BR>\n" );
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document.write( "with daily compounding, the interest is the future value minus the sum of the payments = 160,608.18 - 33,600 = 127,018.18\r<BR>\n" );
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document.write( "with monthly compounding the annual rate of 6.5% is divided by 12 to get a monthly rate of .541666666666.....\r<BR>\n" );
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document.write( "with daily compounding, there are probably several methods to calculate it.\r<BR>\n" );
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document.write( "not knowing which method your instructor might have wanted you to use, the method i chose is the following.\r<BR>\n" );
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document.write( "6.5 / 365 = a daily rate percent of .0178082192.\r<BR>\n" );
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document.write( "divide that by 100 to get a daily rate of .000178082192.\r<BR>\n" );
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document.write( "add 1 to it to get 1.000178082192.\r<BR>\n" );
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document.write( "that's the daily rate plus 1.\r<BR>\n" );
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document.write( "to convert it to a monthly rate plus 1, do the following:\r<BR>\n" );
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document.write( "1.000178082192 ^ (365 / 12) = 1.005430878.\r<BR>\n" );
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document.write( "that's the monthly rate plus 1.\r<BR>\n" );
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document.write( "subtract 1 from that to get .005430878.\r<BR>\n" );
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document.write( "that's the monthly rate.\r<BR>\n" );
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document.write( "multiply that by 100 to get .5430878.\r<BR>\n" );
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document.write( "that's the monthly rate percent that is input into the calculator.\r<BR>\n" );
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document.write( "the rate percents shown in the calculator are the figures i gave you rounded to 6 decimal digits. </SPAN>\n" );
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