Question
Ziv makes their first $1000 deposit into an IRA earning 7.5% compounded annually on their 24th birthday and their last $1000 deposit on their 35th
Ziv makes their first $1000 deposit into an IRA earning 7.5% compounded annually on their 24th birthday and their last $1000 deposit on their 35th birthday (that is, 12 equal deposits in all). With no additional deposits, the amount in the IRA continues to earn 7.5% compounded annually until Ziv retires on their 65th birthday.
(a) How much money is in the account on their 35th birthday? ____ dollars
(b) How much money is in the IRA when Ziv retires? ____ dollars
(c) Callum procrastinates and does not make his first $1000 deposit into an IRA until he is 36, but then he continues to deposit $1000 each until he is 65 (so 30 deposits in all). If Callum's IRA also earns 7.5% compounded annually, how much is in his IRA when he makes his last deposit on his 65th birthday? _____ dollars
(d) Instead of depositing $1000 each year, how much would Callum have to deposit each year (with 30 payments total) in order to have the same amout at age 65 as Ziv does? Annual deposit must be dollars _____
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