Asked by kayla swank on Apr 24, 2024
Cameron started contributing $400 per month to a retirement account when he was married at the age of 26.The account earned 8.7% compounded monthly until Cameron's finances changed when he was 48.His first child started college that year.Cameron didn't want to pay taxes or a penalty on an early withdrawal,but he did stop his monthly contributions to help pay for college.He moved the money in the account to a more conservative investment paying 4.9% compounded monthly until he was 60 and could begin withdrawing funds without penalty.Now Cameron wants to withdraw $2,500 per month to supplement his pension.How old will Cameron be when the money in this account runs out?
Compounded Monthly
The interest calculation method where interest is added to the principal balance monthly, leading to interest on interest.
Conservative Investment
An investment strategy focused on preserving capital and generating a reliable, but possibly lower, return.
Retirement Account
A financial account specifically designated for saving and investing for retirement, offering tax benefits.
- Ascertain the necessary contribution levels to fulfill distinct financial objectives within retirement planning.
Learning Objectives
- Ascertain the necessary contribution levels to fulfill distinct financial objectives within retirement planning.