i am having a hardtime understanding this. I want to know where the $15,386 came from please show the equation.

I am sending you here some explanations and a solution to the problem where I modified the inflation from 4% to 3%..you can redo the same thing but with the 3%.

With inflation growing at 3% annually, the above figures need to be deflated by the following factors:

in 5 years: (1.03)5 = 1.1593

Real Value = Initial Investment * (1 + Annual Return Rate - Annual Inflation Rate)^(Number of Years

The real values of the answers are: $10,000 invested in 9 percent tax-exempt IRA (assuming annual compounding)

5 years: $15,386/1.1593 = $13,271.80

i want to know where the $15,386 came from please show the equation.

Someone in the 36 percent tax bracket can earn 9 percent annually on her investments in a tax-exempt brokerage account value of a one-time $17,000 investment in 5 years? assume the rate of inflation is 4%.