Question

1. If you set aside $5,000 per year (i.e., one deposit of $5,000 each year) in a Roth IRA for the next 25 years (the first contribution is to be made exactly one year from now, so use an ordinary annuity setup), how much will you have at your retirement in 25 years if your IRA earns 8% APR, compounded monthly?

Fig: 1