Phil and Emily Brooks Have Three Sons, Jason, 16, Tom

question 87

Essay

Phil and Emily Brooks have three sons, Jason, 16, Tom, 12, and Adam, 10. They create a Colorado 529 plan for each of their sons by investing $10,000 in three different plans. Each of these investments yields a constant return of 6.5 percent. When they turned 18, Jason and Adam withdrew the funds in their 529 plans and used the money for higher education expenses while Tom withdrew the funds in his 529 plan to start a new business. Assuming that each of the sons have a 15 percent marginal tax rate when they turn 18, how much money will each of the three boys have after paying all applicable taxes due? (Round all interim and final calculations to the nearest whole number)

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Definitions:

Middle Age

A stage of life that spans from approximately 40 to 65 years of age, often characterized by stability, achievement, and an increased focus on health, relationships, and community.

Job Satisfaction

The level of contentment a person feels regarding their job, which can influence their performance and overall wellbeing.

Extrinsic Rewards

Benefits provided by external factors or agents to motivate behavior, such as money, praise, or awards.

Intrinsic Rewards

Satisfaction or pleasure derived from the activity itself rather than from external rewards or outcomes.