Asked by Jakob Deckard on May 17, 2024
Verified
Bill and Ellen Sweatt plan to invest $2500 a year in an educational IRA for their granddaughter Sloane Martin. They will make these deposits on January 2nd of each year. Bill and Ellen feel they can safely earn 8%. How much will be in this account on December 31 of the 18th year?
Educational IRA
A savings plan for education expenses that allows money to grow tax-free until funds are withdrawn to pay for qualified education costs.
Investments
Assets that are purchased with the expectation that they will generate income or appreciate in value over time.
8%
A percentage, often representing an interest rate, return on investment, or growth rate.
- Utilize concepts of present value in different financial decision-making contexts such as savings, investments, and loans.
- Comprehend and compute the future worth of investments.
Verified Answer
KL
Learning Objectives
- Utilize concepts of present value in different financial decision-making contexts such as savings, investments, and loans.
- Comprehend and compute the future worth of investments.