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Nicole is considering opening a Roth Individual Retirement Account. If she invests into the Roth IRA, determine the amount in the account if she makes annual payments of $4,291 into an account paying 2. 23% interest compounded annually for 30 years. A. $132,259. 66 b. $132,505. 45 c. $184,513. 76 d. $180,488. 86.

Respuesta :

Lanuel

The future amount in the account (Roth IRA) is equal to: D. $180,488. 86.

Given the following data:

  • Principal = $4,291
  • Interest rate = 2.23%
  • Time = 30 years

To determine the future amount in the account:

Mathematically, the compound interest for this Roth IRA is given by the formula:

[tex]A = \frac{P(1\;+\;r)^t -1}{r}[/tex]

Where:

  • P is the principal.
  • r is the interest rate.
  • t is the number of years.
  • A is the future amount.

Substituting the given parameters into the formula, we have;

[tex]A = \frac{4291(1\;+\;0.0223)^{30} -1}{0.0223}\\\\A = \frac{4291(1.0223)^{30} -1}{0.0223}\\\\A = \frac{4291(1.93798684094 -1}{0.0223}\\\\A = \frac{4291(0.93798684094)}{0.0223}\\\\A = \frac{4024.901534474}{0.0223}[/tex]

A = $180,488.86

Read more on compound interest here: https://brainly.com/question/25263325

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