WHEN JOSIE LEFT HER OLD JOB AT AGE 47, SHE TRANSFERRED $62,00 INTO AN IRA ACCOUNT AT THE CREDIT UNION OF HER NEW EMPLOYER.

Question

WHEN JOSIE LEFT HER OLD JOB AT AGE 47, SHE TRANSFERRED $62,00 INTO AN IRA ACCOUNT AT THE CREDIT UNION OF HER NEW EMPLOYER. THE MONEY HAS BEEN INVESTED THERE FOR THE LAST 18 YEARS, AND NOW JOSIE IS READY TO RETIRE. HER ACCOUNT HAS BEEN EARNING 6%INTEREST, COMPOUNDED QUARTERLY DURING THE ENTIRE TIME. HOW MUCH MONEY CAN JOSIE TAKE OUT IN A LUMP-SUM RIGHT NOW?

Answer 1

The interest rate is

6%/4 = 6/4% = 3/2% = 1.5% = 0.015 quarterly.

 

The time is 65-47 = 18 and 18 x 4 = 72

 

I am assuming the principal amount is

62,000 because you put the comma

but not the last zero.

 

62000 * (1 + 0.015)^72 = 62000*(1.015)^72 = 181,111.79