You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 25...

You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 25 and make the contributions for 10 years. Your twin sister does the same starting at age 40 and makes the contributions for 25 years. Both of you earn 7 percent annually on your investment. What amounts will you and your sister have at age 65? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar.

Amount on your account: $
Amount on your sister's account: $

Expert Solution

Calculations-

Note-

For you amount will be deposited for 10 years but would be invested till age of 65 i.e 65-25 =40years.It means zero amount deposited for next 30 years.

Where as your twin sister will deposit amount from the age of 40 till age of 65 for 25 years.

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.

jeff jeffy answered 2 years ago

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