To find how much money the employee can withdraw monthly during her retirement, we need to use two formulas: one for the accumulation phase (while she is contributing to the account) and one for the withdrawal phase (after she starts taking distributions).

1. Accumulation Phase (Contributions):

The first part of the problem involves calculating how much money is accumulated in the retirement account after 30 years of monthly contributions.

The formula for the future value of a series of monthly contributions, where interest is compounded monthly, is given by:

$FV = P \times \frac{(1 + r)^n - 1}{r}$

Where:

• $FV$ = Future Value of the account after 30 years
• $P$ = Monthly contribution ($600)
• $r$ = Monthly interest rate (annual rate divided by 12, so $7\% \div 12 = 0.07/12$)
• $n$ = Total number of contributions (months), so $30 \times 12 = 360$ months

2. Withdrawal Phase (Distributions):

After 30 years, she begins to withdraw from the accumulated account over the next 35 years. We can calculate the amount she can withdraw monthly using the annuity formula for withdrawals, which is the present value of an annuity:

$PMT = \frac{FV \times r}{1 - (1 + r)^{-n}}$

Where:

• $PMT$ = Monthly withdrawal amount
• $FV$ = Future value of the account at the end of the accumulation phase (from the first formula)
• $r$ = Monthly interest rate (same as above)
• $n$ = Number of months during the withdrawal phase, so $35 \times 12 = 420$ months

Steps for Solving:

1. Calculate the Future Value (FV) of the retirement account after 30 years of monthly contributions.
2. Use the FV in the annuity formula to find the monthly withdrawal $PMT$ during the 35 years of retirement.

Would you like me to calculate this for you, or would you prefer to work through it yourself step-by-step? Let me know if you need any clarification on the formulas!