Starting at age 25, you deposit $2,000 a year into an IRA account. Treat the yearly deposits into the account as a continuous income stream. If money in the account earns 5%, compounded continuously, how much will be in the account 40 years later, when you retire at age 65? How much of the final amount is interest?
Starting at age 25, you deposit $2,000 a year into an IRA account. Treat the yearly deposits into the account as a continuous income stream. If money in the account earns 5%, compounded continuously, how much will be in the account 40 years later, when you retire at age 65? How much of the final amount is interest?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:Starting at age 25, you deposit $2,000 a year into an IRA account. Treat the yearly
deposits into the account as a continuous income stream. If money in the account earns
5%, compounded continuously, how much will be in the account 40 years later, when
you retire at age 65? How much of the final amount is interest?
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