You set up an IRA with an APR of 2.5% at age 35. At the end of each month, you deposit $102 in the account. How much will the IRA contain when you retire at the age of 65?

Use the future value formula for monthly deposits made at the end of each month: FV = 102[((1 + 0.025/12)^360 − 1)/(0.025/12)]. There are 30 × 12 = 360 deposits, and the monthly interest rate is 0.025/12. The result is about $54,607.49, so the IRA will contain approximately $54,607.49.

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