Kevin made contributions to a Roth IRA over the course of 40 working years. His contributions averaged $3,000 annually. Kevin was in the 25% tax bracket during his working years. The average annual rate of return on the account was 7%. Upon retirement, Kevin stopped working and making Roth IRA contributions. Instead, he started living on withdrawals from the retirement account. At this point, Kevin dropped into the 15% tax bracket. Factoring in taxes, what is the effective value of Kevin’s Roth IRA at retirement? Assume annual compounding.
I really need this explained to me.

Question

Kevin made contributions to a Roth IRA over the course of 40 working years. His contributions averaged $3,000 annually. Kevin was in the 25% tax bracket during his working years. The average annual rate of return on the account was 7%. Upon retirement, Kevin stopped working and making Roth IRA contributions. Instead, he started living on withdrawals from the retirement account. At this point, Kevin dropped into the 15% tax bracket. Factoring in taxes, what is the effective value of Kevin’s Roth IRA at retirement? Assume annual compounding. 
I really need this explained to me.

hba · Answer

FVOA=C x (1+i)^nt - 1/ i

anonymous · Answer

That is what I would use? Future Value? Nothing changed? Thanks for answering me!