1) How much will you have accumulated over a period of 30 years if, in an...

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1) How much will you have accumulated over a period of 30 yearsif, in an IRA which has a 10% interest rate compounded quarterly,you annually invest:
a. $1 b. $4000 c. $10,000 d. Part (a) is called the effectiveyield of an account. How could Part (a) be used to determine Parts(b) and (c)? (Your answer should be in complete sentences free ofgrammar, spelling, and punctuation mistakes.)
2) How much will you have accumulated, if you annually invest$1,500 into an IRA at 8% interest compounded monthly for: a. 5 yearb. 20 years c. 40 years d. How long will it take to earn your firstmillion dollars? Your answer should be exact rounded within 2decimal places. Please use logarithms to solve.

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3.6 Ratings (628 Votes)

1 The formula for compounding of interest is A P 1 rnnt where A is the future value of the investment including interest P is the principal initial amount invested r is the annual interest rate in decimals n is the number of times that interest is compounded in a year and t is the number of years the money is invested Here r 010 and n 4 a Here P 1 so that A See Answer

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