Solve the problem.
-Joan wants to start an IRA that will have $\$ 860,000$ in it when she retires in 29 years. How much should she invest annually in her IRA to do this if the interest is $8 \%$ compounded annually?
A) $\$ 8271.94$
B) $\$ 3352.14$
C) $\$ 4008.78$
D) $\$ 8258.94$

Question

Quizplus · Accepted Answer

The formula for the future value of an annuity is:FV = P * ((1 + r)^n - 1) / rwhere:FV is the future valueP is the annual paymentr is the annual interest raten is the number of yearsIn this case, we have:FV = $860,000r = 8% = 0.08n = 29Solving for P, we get:P = FV * r / ((1 + r)^n - 1)P = $860,000 * 0.08 / ((1 + 0.08)^29 - 1)P = $8271.94Therefore, Joan should invest $8271.94 annually in her IRA to have $860,000 in it when she retires in 29 years.

Solve the Problem $860,000\$ 860,000$860,000 In It When She Retires in 29 Years

Solve the Problem $\$ 860,000$ In It When She Retires in 29 Years