If P Dollars Are Invested at the End of Each $$n = \frac { \log \left[ \frac { A r } { P } + 1 \right] } { \log ( 1 + r ) }$$

question 44

Multiple Choice

If P dollars are invested at the end of each year in an annuity that earns interest at an annual rate r, the amount in the account will be A dollars after n years, where $$n = \frac { \log \left[ \frac { A r } { P } + 1 \right] } { \log ( 1 + r ) }$$
If $\$ 6,000$ is invested each year in an annuity earning $10 \%$ annual interest, when will the account be worth $\$ 45,000$ ?

• A) \(\quad - 3.0\) years
• B) \(\quad 2.8\) years
• C) \(\quad 5.9\) years
• D) \(\quad 13.5\) years
• E) \(\quad 7.5\) years

Recognize the conditions under which deductible contributions can be made to an IRA.

Comprehend the tax implications of contributions and distributions in qualified pension plans.

Distinguish between different types of retirement accounts and their purposes.

Understand the eligibility criteria for making deductible contributions to an IRA.