How much will you have in a Roth IRA if you invest $5,000 a year for 35 years, if money earns 6 percent, and you make the investment at the beginning of each year?
A) $474,181.61
B) $557,173.89
C) $451,601.54
D) $590,604.33

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used to calculate the total amount. Since the investment is made at the beginning of each year, it's an annuity due. The formula is FV = P * [(1 + r)^nt - 1] / r * (1 + r), where P is the annual payment, r is the annual interest rate, and t is the number of years. Plugging in the values gives the correct answer.

How Much Will You Have in a Roth IRA If