Rosalia White will invest $3,000 in an IRA for the next 30 years starting at the end of this year. The investment will earn 13 percent annually. How much will she have at the end of 30 years? (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

This is a future value of an annuity problem, where the future value (FV) can be calculated using the formula: FV = P * [((1 + r)^n - 1) / r], where P is the payment ($3,000), r is the annual interest rate (13% or 0.13), and n is the number of periods (30 years). Plugging in the values: FV = $3,000 * [((1 + 0.13)^30 - 1) / 0.13] ≈ $879,598 when rounded to the nearest dollar.

Rosalia White Will Invest $3,000 in an IRA for the Next