At the age of 24, to save for retirement, you decide to deposit $80 at the end ofeach month in an IRA that pays 5% compounded monthly.a. You will have approximately S in the IRA when you retire.(Do not round until the final answer. Then round to the nearest dollar as needed.)Use the following formula to determine how much you will have in the IRAwhen you retire at age 65.a.P[(1 + n* - 1]A=ornt- 1A =b.Find the interest.

At the age of 24, to save for retirement, you decide to deposit $80 at the end of each month in an IRA that pays 5% compounded monthly. Use the following formula to determine how much you will have in the IRA when you retire at age 65. a. P[(1 +n* - 1] A = or nt A = b. Find the interest.

At the age of 24, to save for retirement, you decide to deposit $80 at the end of each month in an IRA that pays 5% compounded monthly. Use the following formula to determine how much you will have in the IRA when you retire at age 65. a. P[(1 +n* - 1] A = or nt A = b. Find the interest.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

At the age of 24, to save for retirement, you decide to deposit $80 at the end of
each month in an IRA that pays 5% compounded monthly.
a. You will have approximately S in the IRA when you retire.
(Do not round until the final answer. Then round to the nearest dollar as needed.)
Use the following formula to determine how much you will have in the IRA
when you retire at age 65.
a.
P[(1 + n* - 1]
A=
or
nt
- 1
A =
b.
Find the interest.

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