Gbob makes his first $ 800 deposit into an ira earning 7.4 % compounded annually on his 24th birthday and his last $ 800 deposit on his 39th birthday (16 equal deposits in all). with no additional deposits, the money in the ira continues to earn 7.4 % interest compounded annually until iob retirees on his 65th birthday. how much is in the ira when bob retires

FV= $137,440.62

Explanation:

Giving the following information:

Bob makes his first $ 800 deposit into an IRA earning 7.4 % compounded annually on his 24th birthday and his last $ 800 deposit on his 39th birthday (16 equal deposits in all). With no additional deposits, the money in the IRA continues to earn 7.4 % interest compounded annually until Iob retirees on his 65th birthday.

First, 16 years:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {800*[(1.074^16)-1]}/0,074= $23,067.90

Next 25 years.

FV= PV*(1+i)^n

FV= 23,067.90*(1.074)^25= $137,440.62