01.Core Concepts

• Marsha deposits $3,000 into an IRA each year on January 1 for three years. The account earns 10% per year. • End of • Year 1: $3,000(1.10) = $3,300 • Year 2: $3,300(1.10) + 3,000(1.10) = $6,930 • Year 3: $6,930(1.10) + 3,000(1.10) = $10,923 • Calculator: (BEG mode) PV = 0, PMT = –3,000, N = 3, I/YR = 10 • Result: FV = $10,923