On January 1, 1999, Bob decided to place $500 at the end

Chapter 12, Problem 87

(choose chapter or problem)

On January 1, 1999, Bob decided to place $500 at the end of each quarter into a Roth Individual Retirement Account. (a) Find a recursive formula that represents Bobs balance at the end of each quarter if the rate of return is assumed to be 8% per annum compounded quarterly. (b) How long will it be before the value of the account exceeds $100,000? (c) What will be the value of the account in 25 years when Bob retires?

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