What are the values of williams and james ira funds

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Now, it is the end of the year, William and James are twin brothers aged 65. Thirty-five years ago (at the end of the year when he reached age 30), William started an IRA (individual retirement account), putting $2,000 per year in the account since he turns 31. After 10 years of contributions, William stopped making new deposits but left the accumulated contributions in the IRA fund. The fund produced returns of 10 percent per year. No taxes are paid. James started his own IRA when he reached age 41 and contributed $2,000 per year, making his last contribution today. Thus James invested 21 2 times as much as William. James also earned 10 percent on his investments (tax free).

(a) What are the values of Williams and James IRA funds today?

(b) What personal finance lesson does this exercise suggest?

Reference no: EM132376736

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