Answer:
The retirement account will have value of $1,669,731
Explanation:
Payment of a fixed amount for a specified period is called ordinary annuity.
Future value of ordinary annuity formula will be used to calculate the amount of retirement account after 35 years.
Annuity Future value = C x [ (( 1 + r )^t)-1 ] / r
Where
C = Monthly payment = $500
r = rate of interest = 9.5% = 9.5% / 12 = 0.792% = 0.00792
t = time period = 35 years = 35 x 12 = 420 months
AFV = $500 x [ (( 1 + 9.5%/12 )^420)-1 ] / (9.5%/12)
AFV = $1,669,731.48 = $1,669,731
