Solve the problem.
-Laura wants to start an IRA that will have $\$ 650,000$ in it when she retires in 27 years. How much should she invest monthly in her IRA to do this if the interest is $6 \%$ compounded monthly?
A) $\$ 28,798.86$
B) $\$ 792.90$
C) $\$ 805.90$
D) $\$ 2254.57$

Question

Quizplus · Accepted Answer

To find the monthly investment, use the future value of an annuity formula: $FV = P \times \frac{(1 + r)^n - 1}{r}$, where $FV = 650,000$, $r = \frac{0.06}{12}$, and $n = 27 \times 12$. Solving for $P$ gives approximately $\$ 805.90$.

Solve the Problem $650,000\$ 650,000$650,000 In It When She Retires in 27 Years

Solve the Problem $\$ 650,000$ In It When She Retires in 27 Years