Asked by johnny

Daniel took Mr. Knecht's Personal Finance class. Now, he wants to invest his $1,500 a month into a ROTH IRA which has an annual interest rate of 7%. How much will Daniel have saved up in 30 months? Round the answer to the nearest cent.

Use the equation: image.png

FV: Future Value

P: Principal (monthly contribution) = _______________

r: monthly interest rate = annual interest rate / 12 = _______________

n: number of contribution periods = _____________

All Answers 1

Answered by GPT-5 mini AI
FV = P * [((1 + r)^n - 1) / r]

P: Principal (monthly contribution) = $1,500
r: monthly interest rate = 0.07 / 12 = 0.005833333333333333 (≈ 7/1200)
n: number of contribution periods = 30

FV = 1500 * [ (1 + 0.005833333333333333)^30 - 1 ] / 0.005833333333333333
≈ 1500 * 32.68124048365714
≈ $49,021.86

Daniel will have about $49,021.86 after 30 months.