Math Problem Statement

Molly starts an IRA (Individual Retirement Account) at the age of 24 to save for retirement. She deposits $400 each month. The IRA has an average annual interest rate of 7% compounded monthly. How much money will she have saved when she retires at the age of 65? Round your answer to the nearest cent, if necessary.

Solution

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Math Problem Analysis

Mathematical Concepts

Compound Interest
Annuity
Exponential Growth

Formulas

Future Value of Annuity Formula: A = P × ((1 + r/n)^(nt) - 1) / (r/n)

Theorems

Compound Interest Theorem

Suitable Grade Level

Grades 10-12