You graduate from college and get your first job. You open a Roth IRA with $2,000 at the age of 25. You
invest $3,000 at age 26, $4,000 at age 27, and $5,000 at age 28.
You then receive a promotion that brings your
income to a level that disqualified you from making further contributions to the Roth IRA. Construct a table
that shows how much will you have in your IRA at the age of 60 if you had invested in an account that paid
an average yield of 8 percent.
Age Years to
Retire
Annual
Contributio
n
FVF Value
25 35 $2,000.00 14.78534 $29,570.69
26 34 $3,000.00 13.69013 $41,070.40
27 33 $4,000.00 12.67605 $50,704.20
28 32 $5,000.00 11.73708 $58,685.41
Total Value $180,030.70
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