YOU and your BEST FRIEND just graduated from college. You both went to the same college and majored in the same field. You both started working at age 22 in similar workplaces. You are both offered a 401(k)-retirement plan. Your workplace matches your 401(k) contributions up to 6% of your total contributions. Your friends workplace does NOT. Each of you decided upon a different course of action for your respective retirement plans. Assuming each plan earned 15% interest as an annual return and both of you decided to retire at age 50, calculate the earnings each plan generated. Upon the advice of your Personal Finance professor (hint, hint), YOU began immediately putting $6,000 per year in an individual retirement account (IRA) and $19,500 per year in a 401K. Your company will match an additional 6% of your total 401(k) contribution. You contributed for a total of 15 years and receive 15% interest on the investment. After 15 years, you made no further contributions into the account, but the account will continue to gain interest until retirement. Your BEST friend, did not contribute to their retirement accounts until they turned 27, even though you both worked in similar places. They had planned to simply invest $6000 and $19,500 each year for the remaining years until they retired at age 50. They will also receive 15% interest on their investments.

12. How much did you contribute out of pocket in total into your plan?

13. How much did you best friend contribute out of pocket in total into plan?

14. How much did you accumulate in your retirement account with interest?

15. How much did your best friend accumulate in their retirement account with interest?