Suppose that you are 25, single, and in a 25% bracket for federal income tax and a 7% bracket for state and local income taxes (in 2015 this corresponded to an income, beyond exemptions and deductions, of $37,000-$90,000 for a single person). This means that you pay an income tax rate ("marginal rate") of 32% on the part of your income (but a lower rate on the rest). Suppose that you commit to saving $100 per month toward retirement.

a) How much will be in your fund at age 65 if you can get a steady return of 6% compounded monthly?

b) How much will you pay in income tax on that $100?