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Continuous Income Stream

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Starting at age 25, you deposit $2000 a year into an IRA account for retirement. Treat the yearly deposits into the account as a continuous income stream. If money in the account earns 6%, compounded continuously, how much will be in the account 40 years later, when you retire at age 65? How much of the final amount is interest? What is the value of the IRA when you turn 65?

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Solution Preview

This question is asking us to find the Future Value of a continuous income stream, compounded continuously. The formula is as follows: see the attached file. ...

Solution Summary

This solution contains a step-by-step solution is provided in a pdf file with full computations to determine the final amount and the value of the IRA.