Margo starts an individual retirement account (IRA) by depositing $350 at the beginning of each month into an account that earns 5.5% interest compounded monthly. If Margo continues this plan for 20 years, what will be the value (in dollars) of her account? 

To find the value of Margo's account after 20 years, we can use the formula for the future value of an annuity due (since she makes her deposits at the beginning of each month):

\[
FV = P \times \left( \frac{(1 + r)^n - 1}{r} \right) \times (1 + r)
\]

Where:
- $ FV $ is the future value of the account.
- $ P $ is the monthly deposit (\$350).
- $ r $ is the monthly interest rate.
- $ n $ is the total number of payments.

### Step 1: Identify the given values.
- Annual interest rate = 5.5% = 0.055.
- Monthly interest rate $ r = \frac{0.055}{12} \approx 0.0045833 $.
- Number of years = 20 years.
- Number of months in 20 years $ n = 20 \times 12 = 240 $.

### Step 2: Plug the values into the formula.

\[
FV = 350 \times \left( \frac{(1 + 0.0045833)^{240} - 1}{0.0045833} \right) \times (1 + 0.0045833)
\]

Now, let's calculate this.The value of Margo's account after 20 years will be approximately **$153,168.41**.

Would you like further details or explanations on how this is calculated?

Here are 5 related questions for further exploration:
1. What if the interest rate was 6% instead of 5.5%?
2. How would the final amount change if she made deposits at the end of the month?
3. What is the total amount of interest earned after 20 years?
4. How does compounding frequency affect the future value of an investment?
5. What happens if Margo stops depositing after 10 years but lets the account continue growing?

**Tip:** The power of compounding grows significantly over time. Starting early can greatly enhance the future value of an investment!

Margo starts an individual retirement account (IRA) by depositing $350 at the beginning of each month into an account that earns 5.5% interest compounded monthly. If Margo continues this plan for 20 years, what will be the value (in dollars) of her account?

Find out how to calculate the future value of Margo's IRA with monthly $350 deposits, compounded at 5.5% over 20 years. Using the Future Value of an Annuity Due formula, this problem demonstrates key financial math concepts related to compound interest and retirement savings.

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