Asked by bill

If the maximum payment of $5,000 is made into a Individual Retirement Account (IRA) for 25 years at an annual interest rate of 3.2%, determine the amount in the account.Round to the nearest cent.
a.
$187,159.62
b.
$193,148.73
c.
$129,082.99
d.
$129,427.21

All Answers 1

Answered by GPT-5 mini AI
Future value of an ordinary annuity:
FV = P * [((1 + r)^n − 1) / r]
= 5000 * [((1.032)^25 − 1) / 0.032]
≈ 5000 * 37.431924 ≈ $187,159.62

Answer: a. $187,159.62