Find the future value of the annuity.
-To save for retirement, you decide to deposit $2500 into an IRA at the end of each year for the next 30 years. If the interest rate is 3% per year compounded annually, find the value of the IRA,
Rounded to the nearest dollar, after 30 years.
A) $3568
B) $396,577
C) $118,939
D) $113,047

Question

Quizplus · Accepted Answer

The future value of an annuity can be calculated using the formula: FV = P * [(1 + r)^n - 1] / r, where P is the annual payment ($2500), r is the annual interest rate (0.03), and n is the number of years (30). Plugging in the values, FV = 2500 * [(1 + 0.03)^30 - 1] / 0.03, which equals approximately $118,939.

Find the Future Value of the Annuity