Homework Sourse45 year old deposits 1000 at the end of every 6 months into
45 year old deposits 1000 at the end of every 6 months into an IRA. If the account earns 6.45% compounded semi annually how much will there be 22 years later?
45 year old deposits 1000 at the end of every 6 months into an IRA. If the account earns 6.45% compounded semi annually how much will there be 22 years later?
Solution
Amount = $1,000 * (((1+r)^n) - 1)/r * ((1+r)^n)
Where r = 6.45%/2 = 3.225%, n = 22yrs*2 = 44
Amount = $1,000*(((1+3.225%)^44) - 1) / 3.225%*((1+3.225%)^44)
=$381,139.15
