Individual retirement account

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On your 30th birthday, you decide to open an individual retirement account (IRA) and deposit $500. You continue to make monthly deposit of $500 each until your 45th birthday (your last deposit of $500 will be made on your 45th birthday). You will make no more deposits into this IRA and you plan to retire on your 65th birthday. Assume that your IRA can earn an annual interest rate of 6%, compounded monthly.

(a) How much total deposit will you make into this IRA?

(b) How much money is in your IRA when you retire on your 65th birthday?

(c) How much money is in your IRA if you delay by 10 years (i.e., your first deposit of $500 will be made on your 40th birthday and last on your 55th birthday)?

Reference no: EM131021590

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