An Individual Retirement Account (IRA) is an annuity that is set up to save for retirement. IRAS differ from TDAS in that an IRA allows the participant to contribute money whenever heor she wants, whereas a TDA requires the participant to have a specific amount deducted from each of his or her paychecks.When Shannon Pegnim was 14, she got an after-school job at a local pet shop. Her parents told her that if she put some of her earnings into an IRA, they would contribute an equalamount to her IRA. That year and every year thereafter, she deposited $500 into her IRA. When she became 25 years old, her parents stopped contributing, but Shannon increased herannual deposit to $1,000 and continued depositing that amount annually until she retired at age 65. Her IRA paid 7.5% interest. Find the following. (Round your answers to the nearestcent.)(a) The future value of the account$ 519719.69(b) Shannon's and her parents' total contributions to the accountShannonShannon's parents(c) The total interest$ 468719.69(d) The future value of the account if Shannon waited until she was 19 before she started her IRA$ 357969.35(e) The future value of the account if Shannon waited until she was 24 before she started her IRA$ 245300.76

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Answered: (a) The future value of the account $…

(a) The future value of the account $ 519719.69 (b) Shannon's and her parents' total contributions to the account |x |x Shannon Shannon's parents $ (c) The total interest $ 468719.69

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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10 3 ut of Your client just died. He owned a life insurance policy on his life that is payable to his daughter. The relevant information about this policy is as follows: Face Value $1,000,000 Cash surrender value $ 50,000 What is included in his estate? a. $20,000 ($1,000,000/$50,000) b. $525,000 (($1,000,000+50,000)/2) O c. Nothing d. $50,000 e. $1,000,000 Nex
An estate has the following income: $5,000 3,000 1,000 Rental income Interest income Dividend income The interest income was immediately conveyed to the appropriate beneficiary. The dividends were given to charity as per the decedent's will. What is the taxable income of the estate? Multiple Choice $5,000. $4.400. $8,000. $8,400.
A5
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7. Annaliese Nuber insured the contents of her apartment for $22,500. The premium is S0.63 per S100 with a $750 deductible, Her personal property that is used away from home is insured at 10% of the policy's total coverage. Living expense coverage is 20% of the policy's total coverage. a. At what value is the personal property that she uses away from home insured? b. For what value is her living expense covered? c. What is the annual insurance premium that Annaliese pays?
Problem 19-36 (LO. 7) At the time of her death, Ariana held the following assets. Personal residence (title listed as "Ariana and Peter, tenants by the entirety with right of survivorship") Savings account (listed as "Ariana and Rex, joint tenants with right of survivorship") with funds provided by Rex Certificate of deposit (listed as "Ariana, payable on proof of death to Rex") with funds provided by Ariana Unimproved real estate (title listed as "Ariana and Rex, equal tenants in common") Insurance policy on Ariana's life, issued by Lavender Company (Ariana's estate is the designated beneficiary) Insurance policy on Ariana's life, Issued by Crimson Company (Rex is the designated beneficiary, but Ariana can change beneficiaries) Fair Market Value $900,000 40,000 100,000 500,000 300,000 400,000 Assuming that Peter and Rex survive Ariana, how much is included in Ariana's probate estate? Ariana's gross estate? (Refer to text Section 18-3a as needed.) Ariana's probate estate includes $…
Question #59 of 85 Question ID: 1251855 Your client is terminally ill. Her potential gross estate, valued at $12.9 million, includes the following assets: A life insurance policy on her life, with a death benefit of $500,000; her deceased husband is the named beneficiary A general power of appointment (valued at $500,000) over the assets of a trust established by her husband; her children are the designated remaindermen of the trust A $500,000 retained life estate in the family residence Your client also expects to receive a $500,000 bequest within the next four months from her deceased sister's estate; the client's children are the contingent beneficiaries of the bequest. Your client would like to transfer a portion of her estate to her two children while she is alive to reduce her potential estate tax liability to the greatest extent possible. Which one of the following exclusion techniques would be the most appropriate to reduce the value of your client's potential gross…
Part 1 - Scenario 4 Review the following scenario. Use the information provided to answer questions about the taxpayer’s 2020 return.Jasmine Dayne (29) is filing as a single taxpayer. In 2020, she received income from the following sources: $39,000 in wages. Alimony payments totaling $14,328. Her divorce was finalized in October 2019. Unemployment compensation of $6,200. Jasmine also made a timely $2,000 contribution to a traditional IRA for 2020.She had no other income or adjustments, and she will claim the standard deduction.To assist you in answering questions about Jasmine’s tax return, you may refer to Part I of Schedule 1, Additional Income and Adjustments to Income, which is shown below.Part I Additional Income1 Taxable refunds, credits, or offsets of state and local income taxes. ________2a Alimony received. _________2b Date of original divorce or separation agreement (see instructions). _________3 Business income or (loss). Attach Schedule C. _________4 Other gains or…
c. How much will the family receive (to the nearest dollar)? 647.51/1-6 1-(1.005264 .OOS 647.51.146.4 = 94795.46 150000-94795.46-55204.54₁,6 = 33122.72 4. A couple are planning for retirement. They plan to retire at age 70. At that time they wish to be able to withdraw $7500 per month from their retirement account for a period of 25 years, reducing the balance to zero. How much should they start saving now in an account that pays 7.54% compounded monthly to achieve their goal? Assume that they will be able to earn at least 7.54% interest compounded monthly from now until they are age 95. nt How much interest is earned over the 65 year period? A = P(1 + £ ) m² FV= PMT ((1+1)^-1) 7500 (1.076+25-1)
Problem 7-25 Low-Income Retirement Plan Contribution Credit (LO 7.9) George and Amal file a joint return in 2021 and have AGI of $38,200. They each make a $1,600 contribution to their respective IRAS. Assuming that they are not eligible for any other credits, what is the amount of their Saver's Credit?
G5.

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