Question

Mary plans to fund her individual retirement account by contributing $2,000 at the end of each year for the next 10 years. If Maria can generate 10 percent of her contribution, how much will she have at the end of the 10th year?

Answer 1

We can use future value of annuity formula to answer this:

Where,
FVA = Future Value of Annuity
A = Annuity or payment per year
i = rate of interest in decimal form. (10% = 0.10)
n = number of years

Substituting the values, we get:

Therefore, Mary will have  $31,874.85 at the end of 10th year.