Earl Broker is 25 years old, senior in collegeand he decides to put $150 every year in aRoth IRA through Vanguard total stockmarket ETF. It gives the return o 10%. Findthe total sum of he will receive when he willwithdraw the money in his 65th birthday.
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Roth IRA work as a compound interest. it help to grow money faster
If Earl invested in the age of 25 year and invested 150 $ every year. So, At the age of 65 her total investment is 6000$
Amount = P ( 1 + r /100 ) ⁿ
Amount = 6000 ( 1 + 10 /100) ⁴⁰
Amount = 6000 ( 1 + o.1 )⁴⁰
Amount = 6000 ( 1.1 ) ⁴⁰
Amount = 6000 ₓ 45.25
Amount = 271500
Total sum she received at the age of 65 is $ 271500
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