Edward Johnson Decided to Open Up a Roth IRA

Multiple Choice

Edward Johnson decided to open up a Roth IRA. He will invest $1,800 per year for the next 35 years. Deposits to the Roth IRA will be made via a $150 payroll deduction at the end of each month. Assume that Edward will earn 8.75% annual interest compounded monthly over the life of the IRA. How much will he have at the end of 35 years?

A) $125,250
B) $250,321
C) $363,000
D) $414,405