bailey starts an IRA at the age of 34, she deposits $450 each month, the interest rate is 5% compounded monthly. how much will she have saved if she retires at age 65

Bailey's IRA can be calculated using the **future value of an annuity formula** because she is making regular monthly contributions with interest being compounded monthly.

The future value $ FV $ of an annuity can be calculated with the following formula:

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

Where:
- $ P $ is the monthly deposit ($450),
- $ r $ is the monthly interest rate (5% annual rate means 5% / 12 months = 0.05/12 = 0.004167),
- $ n $ is the total number of payments (from age 34 to 65 is 31 years, so $ n = 31 \times 12 = 372 $ months).

Now, let's compute $ FV $. 

I’ll calculate it now.Bailey will have saved approximately **$399,202.84** by the time she retires at age 65, assuming she continues to deposit $450 monthly into her IRA at a 5% annual interest rate compounded monthly.

Would you like more details or have any questions?

Here are 5 related questions to explore further:
1. What if the interest rate changed to 6%? How much would Bailey save?
2. How much would Bailey save if she started her IRA 10 years earlier?
3. What if Bailey increases her monthly deposit to $500?
4. How does the future value change with quarterly compounding instead of monthly?
5. What is the total amount Bailey contributes versus the total interest earned?

**Tip**: Starting early in retirement savings allows compound interest to work in your favor, significantly increasing your future balance!

Bailey starts an IRA at the age of 34, she deposits $450 each month, the interest rate is 5% compounded monthly. How much will she have saved if she retires at age 65?

Learn how to calculate the future value of an IRA with $450 monthly contributions, a 5% annual interest rate compounded monthly, and a 31-year saving period. Using the future value of an annuity formula, find out how much Bailey will have saved by age 65.

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