Shaylea age 22, just started working full-time and planes to deposit $3,000 annu

Question

Shaylea age 22, just started working full-time and planes to deposit $3,000 annually into an IRA earning 7 percent interest compounded annually. Deposit will be made each year. How much would she have in 20 years , 30 and 40 if she change her period and instead invested $250 monthly and the investment also change to monthly compounding Shaylea age 22, just started working full-time and planes to deposit $3,000 annually into an IRA earning 7 percent interest compounded annually. Deposit will be made each year. How much would she have in 20 years , 30 and 40 if she change her period and instead invested $250 monthly and the investment also change to monthly compounding

Explanation / Answer

Hi Team,

In the Compounding the interest for the second month will be calculated on the principal of the first month(250USD) and interest of the first month(1.45833 USD). So the principal for the second month will be 251.483 USD.

If he contributes 250 USD monthly for every month @7% interest at the end of will have a amount of USD 1009.685., 2029.124 USD and 4077.853 USD at the end of 20th, 30 th and 40 th Years Respectively.

Hope this answers your question pls do let me know if you have further queries

)

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