Karen Has Been Depositing $150 at the End of Each

question 53

Multiple Choice

Karen has been depositing $150 at the end of each month in a tax-free retirement account since she was 30. Matt, who is the same age as Karen, started depositing $300 at the end of each month in a tax-free retirement account when he was 40. Assuming that both accounts have been and will be earning interest at the rate of 7%/year compounded monthly, who will end up with the larger retirement account at the age of 65, Karen or Matt? ​

• A) Matt will end up with the larger retirement account.
• B) Karen will end up with the larger retirement account.
• C) Karen and Matt will end up with the equal retirement accounts.

---

Definitions:

Individualism

A social theory favoring freedom of action for individuals over collective or state control.

Collectivism

A cultural value that emphasizes the importance of groups and collective action, often prioritizing the needs and goals of the group over individual desires.

Social Categorization

The practice of organizing individuals into categories based on common traits such as race, gender, or nationality.

Cognitive Error

A mistaken thought process leading to misjudgment or irrational decision-making.