Question

Lisa is 21 years old and starting an IRA (individual retirement account). She is going to invest $50 at the beginning of each month. The account is expected to earn 2.5% interest, compounded monthly. How much money, rounded to the nearest dollar, will Lisa have in her IRA if she wants to retire at age 52?

A. $28,052
B. $28,111
C. $40,676
D. $40,731

Answer 1

FVAD=50[((1+0.025/12)^(12*31)-1)/(0.025/12)]*(1+0.025/12)
FVAD=28110.7 round
FVAD=28111