Homework SourseIf you open an IRA and invest 3000 a yearat the end of the y
If you open an IRA and invest $3,000 a year(at the end of the year), how much will be in the account after twenty-five years if the funds earn 5 percent annually? How much would be in the account if payments were made at the beginning of the year? Save
Solution
If Invest at Beginning of year
| If Invest at end of year | |
| Computing future value | |
| using Financial calculator | |
| PMT | -3000 |
| N= | 25 |
| PV= | 0 |
| I/Y | 5.00% |
| Press CPT and FV | |
| FV | $143,181.30 |
| If Invest at Beginning of year | |
| Computing future value | |
| using Financial calculator | |
| PMT | -3000 |
| N= | 25 |
| PV= | 0 |
| I/Y | 5.00% |
| Press CPT and FV | |
| FV= | $150,340.36 |
