Question

Robin, who is self-employed, contributes $5500/year into a Keogh account. How much will he have in the account after 35 years if the account earns interest at the rate of 2.5%/year compounded yearly? (Round your answer to the nearest cent.)

Answer 1

Assuming the payments are made at the end of the year, that way the formula fits,

amount = 5500( 1.025^35 - 1) / .025
= ....

If you don't get around $300,000 let me know so we can find out where you are going wrong.