An Individual Retirement Account (IRA) is an annuity that is set up to save for retirement....

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An Individual Retirement Account (IRA) is an annuity that is setup to save for retirement. IRAs differ from TDAs in that an IRAallows the participant to contribute money whenever he or shewants, whereas a TDA requires the participant to have a specificamount deducted from each of his or her paychecks. When ShannonPegnim was 14, she got an after-school job at a local pet shop. Herparents told her that if she put some of her earnings into an IRA,they would contribute an equal amount to her IRA. That year andevery year thereafter, she deposited $500 into her IRA. When shebecame 25 years old, her parents stopped contributing, but Shannonincreased her annual deposit to $1,000 and continued depositingthat amount annually until she retired at age 65. Her IRA paid 7.5%interest. Find the following. (Round your answers to the nearestcent.) (a) The future value of the account $ (b) Shannon's and herparents' total contributions to the account Shannon $ Shannon'sparents $ (c) The total interest $ (d) The future value of theaccount if Shannon waited until she was 19 before she started herIRA $ (e) The future value of the account if Shannon waited untilshe was 24 before she started her IRA

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The future value of an annuity A over period N at interest rate of R is given by A R x 1 RN 1 Part a A 1000 Initially it was 500 each from Shannon and her parents subsequently it was from See Answer

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An Individual Retirement Account (IRA) is an annuity that is setup to save for retirement. IRAs differ from TDAs in that an IRAallows the participant to contribute money whenever he or shewants, whereas a TDA requires the participant to have a specificamount deducted from each of his or her paychecks. When ShannonPegnim was 14, she got an after-school job at a local pet shop. Herparents told her that if she put some of her earnings into an IRA,they would contribute an equal amount to her IRA. That year andevery year thereafter, she deposited $500 into her IRA. When shebecame 25 years old, her parents stopped contributing, but Shannonincreased her annual deposit to $1,000 and continued depositingthat amount annually until she retired at age 65. Her IRA paid 7.5%interest. Find the following. (Round your answers to the nearestcent.) (a) The future value of the account $ (b) Shannon's and herparents' total contributions to the account Shannon $ Shannon'sparents $ (c) The total interest $ (d) The future value of theaccount if Shannon waited until she was 19 before she started herIRA $ (e) The future value of the account if Shannon waited untilshe was 24 before she started her IRA