5 Find the Value of an Annuity

question 97

Multiple Choice

5 Find the Value of an Annuity
Solve the problem. Round to the nearest dollar if needed.
-To save for retirement, you decide to deposit $2500 into an IRA at the end of each year for the next 35 years. If the interest rate is 9% per year compounded annually, find the value of the IRA after 35 years.

• A)$539,277
• B)$48,535
• C)$492,456
• D)$23,272,500

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Definitions:

Zero Population Growth

A demographic balance where the number of people in a specified population neither grows nor declines, due to the birth rate equaling the death rate.

Demographic Transition Model

A concept explaining how countries or regions experience a decline in both birth and death rates when transitioning from a pre-industrial stage to an industrial economic system.

Postindustrial Stage

A phase in societal development marked by a shift from a manufacturing-based economy to a service-oriented economy, often seeing a decline in traditional industries.

Transitional Stage

A phase in development or progress where significant changes occur, leading from one state or condition to another.