You are graduating from college at the end of this semester and after reading the The Business of Life box in this? chapter, you have decided to invest ?$5,300 at the end of each year into a Roth IRA for the next 46 years

Finance Dec 21, 2020

You are graduating from college at the end of this semester and after reading the The Business of Life box in this? chapter, you have decided to invest ?$5,300 at the end of each year into a Roth IRA for the next 46 years. If you earn 8 percent compounded annually on your? investment, how much will you have when you retire in 46 ?years? How much will you have if you wait 10 years before beginning to save and only make 36 payments into your retirement? account?

How much will you have when you retire in46 ?years? ?(Round to the nearest? cent.)

Expert Solution

Calculating Value in 46 years,

Using TVM Calculation,

FV = [PV = 0, PMT = 5,300, N = 46, I = 0.08]

FV = $2,217,658.15

Calculating value in 36 years

Using TVM Calculation,

FV = [PV = 0, PMT = 5,300, N = 36, I = 0.08]

FV = $991,641.38

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