You begin working a full-time job after graduation. You work for 40 years. Every month, you contribute $500 to an individual retirement account (IRA). Assume that you earn a 0.75 percent return per month. Please show all of your work and cite all sources used.

(a) What is an IRA? What is the difference between a traditional IRA and a Roth IRA?

(b) How much money is in your IRA when you retire? Assume that you make a total of 40 x 12 = 480 contributions.

(c) You plan to use your IRA to fund your retirement. If you will draw on the balance calculated in part (b) for a total of 30 years, how much can you withdraw each month? Assume you earn a return of 0.50 percent per month on your retirement savings