Alex wants to start an IRA that will have $1,250,675 in it when he retires in 30 years. How much should he invest semiannually in his IRA to do this if the interest is 4.5% compounded semiannually? Assume an Annuity Due. Round to the nearest cent.

For a semiannual annuity due, the periodic interest rate is 4.5% ÷ 2 = 0.0225, and there are 30 × 2 = 60 deposits. Use the future value formula for an annuity due: FV = PMT × [((1 + 0.0225)^60 − 1) ÷ 0.0225] × 1.0225. Solving for PMT gives about $9,828.44 per deposit, so the correct choice is $9,828.44.

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