Barry Cuda currently has $15,000 in his Roth IRA which has been earning 7%. Barry is...

Barry Cuda currently has $15,000 in his Roth IRA which has been earning 7%. Barry is planning on depositing $5500 annually for the next 40 years into this IRA. Assuming Barry's IRA continues earning 7% annually, what will Barry's IRA be worth at the end of 40 years?

Group of answer choices

$1,113,020

$1,322,630

$780,000

$967,955

Expert Solution

Rate = 7%
Nper = 40
PMT = $5500
PV = $15,000

Future value can be calculated by using the following excel formula:
=FV(rate,nper,pmt,pv)
=FV(7%,40,-5500,-15000)
= $1,322,630

Amount at the end of 40 years = $1,322,630

jeff jeffy answered 1 year ago

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