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Jake Werkheiser decides to invest $5000 in an IRA at the end of each year for the next 12 years. If he makes these investments, and if the certificates pay 9%, compounded annually, how much will he have at the end of the 12 years?

Respuesta :

Answer:

Jake Werkheiser will have $170,322.48 at the end of 12 years.

Explanation:

We use the following formula to find the future value,

[tex]S=R[\frac{(1+i)^n-1}{i}](1+i)[/tex]

S= future value

R= yearly payment =$5000

i= rate of interest = 9%=0.09

n =time =12 years.

Now putting the value of i, n, R

[tex]S=5000[\frac{(1+0.09)^{12}-1}{0.09}](1+0.09)[/tex]

 =$170,322.48

Jake Werkheiser will have $170,322.48 at the end of 12 years.

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