Bonus 2. Vanessa was hired as a government contractor out of college. As part of her benefita, she was given the option to invest in a retirement account earning 4.27% interest compounded monthly, with her employer matching her contributions up to 6% of her monthly pre-tax salary. Vanessa wants to take full advantage of her employer's contributions, and does so for the first 10 years carning 85, 000 each month before taxes. However, in the tenth year she receives promotion increasing her monthly salary to $9, 200. If she continues to take full advantage of her employer's contributions, how much will she have saved for retirement if she works for an additional 30 years? How much will she be able to withdraw each month if she intends to make her retirement fund last 20 years?
Bonus 2. Vanessa was hired as a government contractor out of college. As part of her benefita, she was given the option to invest in a retirement account earning 4.27% interest compounded monthly, with her employer matching her contributions up to 6% of her monthly pre-tax salary. Vanessa wants to take full advantage of her employer's contributions, and does so for the first 10 years carning 85, 000 each month before taxes. However, in the tenth year she receives promotion increasing her monthly salary to $9, 200. If she continues to take full advantage of her employer's contributions, how much will she have saved for retirement if she works for an additional 30 years? How much will she be able to withdraw each month if she intends to make her retirement fund last 20 years?
Chapter2: Career Planning
Section: Chapter Questions
Problem 3DTM
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7
Transcribed Image Text:Bonus 2.
Vanessa was hired as a government contractor out of college. As part of her benefits, she
was given the option to invest in a retirement account earning 4. 27% interest compounded monthly, with
her employer matching her contributions up to 6% of her monthly pre-tax salary.
Vanessa wants to take full advantage of her employer's contributions, and does so for the first 10 years
carning $5, 000 cach month before taxes. However, in the tenth year she receives promotion increasing her
monthly salary to $9, 200. If she continues to take full advantage of her employer's contributiona, how much
will she have saved for retirement if she works for an additional 30 years? How much will she be able to
withdraw each month if she intends to make her retirement fund last 20 years?
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