Redo 3 When Jamal graduated from college recently, his parents gave him $1,830 a
ID: 2719570 • Letter: R
Question
Redo 3
When Jamal graduated from college recently, his parents gave him $1,830 and told him to use it wisely. Jamal decided to use the money to start a retirement account. After doing some research about different options, he put the entire amount into a tax-deferred IRA that pays 15 percent interest, compounded annually. Calculate how much money Jamal will have in his IRA at the end of 10 years, assuming that the interest rate remains the same and that he does not deposit any additional money. Use Exhibit 1-A.(Round time value factor to 3 decimal places and final answer to 2 decimal places.)
IRA balance=
Previous wrong answer: 7,403.37
Redo 3
When Jamal graduated from college recently, his parents gave him $1,830 and told him to use it wisely. Jamal decided to use the money to start a retirement account. After doing some research about different options, he put the entire amount into a tax-deferred IRA that pays 15 percent interest, compounded annually. Calculate how much money Jamal will have in his IRA at the end of 10 years, assuming that the interest rate remains the same and that he does not deposit any additional money. Use Exhibit 1-A.(Round time value factor to 3 decimal places and final answer to 2 decimal places.)
IRA balance=
Previous wrong answer: 7,403.37
Explanation / Answer
Time Value Factor = FV of $1 compounded at 15% for 10 years
= 4.046
Principal sum to be invested = $1830
Amount to be received after 10 years from today = 1830*4.046
= $7404.18
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