Asked by chris

At age 25 someone sets up an IRA​ (individual retirement​ account) with an APR of 4%. At the end of each month he deposits ​$85 in the account. How much will the IRA contain when he retires at age​ 65? Compare that amount to the total deposits made over the time period.

I am trying to figure out after retirement how much $ the IRA will contain
Answered by Reiny
i = .04/12 = .00333...
n = age(65 - 25) * 12 = 480 payments

You need to use the "amount of an annuity" formula

amount = 85(1.003333...^480 - 1)/.003333...
= 100,466.72

not going to get you very far into retirement. Better increase your payment.
Answered by christopher
How would I find the total deposit made over the time period?
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