Anyone know the formula to this question?
Ashima made contributions to a Roth IRA over the course of 27 working years. His contributions averaged $2,800 annually. Ashima was in the 27% tax bracket during his working years. The average annual rate of return on the account was 5%. Upon retirement, Ashima stopped working and making Roth IRA contributions. Instead, he started living on withdrawals from the retirement account. At this point, Ashima dropped into the 18% tax bracket. Factoring in taxes, what is the effective value of Ashima’s Roth IRA at retirement? Assume annual compounding.

Question

Anyone know the formula to this question?
Ashima made contributions to a Roth IRA over the course of 27 working years. His contributions averaged $2,800 annually. Ashima was in the 27% tax bracket during his working years. The average annual rate of return on the account was 5%. Upon retirement, Ashima stopped working and making Roth IRA contributions. Instead, he started living on withdrawals from the retirement account. At this point, Ashima dropped into the 18% tax bracket. Factoring in taxes, what is the effective value of Ashima’s Roth IRA at retirement? Assume annual compounding.

ganeshie8 · Answer

use the ordinary annuity formula to calculate amount accumulated in 27 years first

ganeshie8 · Answer

and subtract the tax

ganeshie8 · Answer

do u have the ordinary annuity formula wid u ?

ganeshie8 · Answer

Future Value =  $\large  C\bullet \frac{(1+i)^{nt}-1}{i}$

ganeshie8 · Answer

^^thats the ordinary annuity formula

ganeshie8 · Answer

figure out the numbers and plugin

anonymous · Answer

omg thank you so much!!!!

ganeshie8 · Answer

it can be tricky.... 
you need to subtract the tax also