At the end of each year, $5,000 is invested into an IRA earning 3% compounded annually.

(A) How much will be in the account at the end of 30 years? Use the annuity formula

where

P = periodic payment

i = rate per period

n = number of payments (periods)

F = FV = future value

(B) Use graphical approximation methods to determine the rate of interest that would produce $300,000 in the account at the end of 30 years.

Transcribed Image Text:

(1 + i)" - 1 i F(P, i, n) = P-