Homework help needed

Accounting
Tutor: None Selected Time limit: 1 Day

Bill plans to fund his individual retirement account (IRA) with a maximum contribution of $2000 at the end of each year for the next 20 years. If Bill can earn 12% on his contributions, how much will he have at the end of 20th year? (Round to the nearest whole dollar)

Jun 23rd, 2015

Thank you for the opportunity to help you with your question!

Hi, attached is the solution of your problem -

Finance- Final amount-ellery.xlsx

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jun 23rd, 2015

Hi,

below is the solution using future value of annuity method

Annuity = $2000

Interest rate = 12%

Time = 20 years

For 12% and 20 years, future value interest factor of annuity is 72.0524 (use future value table to locate this values)

Thus final amount is = $2000*72.0524

                                = $144104.8

                                 = $ 144105

Jun 23rd, 2015

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Jun 23rd, 2015
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Jun 23rd, 2015
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