Determine the tax-free amount of the monthly payment in each of the following instances. Use the life expectancy tables. Use Table Table III and Table V. Required: a. Person A is age 59 and purchased an annuity for $84,000. The annuity pays $800 per month for life. Note: Round exclusion percentage computation to one decimal place. b. Person B is 68 and purchased an annuity for $82,000. The annuity pays $1,050 per month for life. Note: Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places. c. Person C is 61 and purchased an annuity for $42,000 that pays a monthly payment of $650 for 10 years. Note: Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places. a. Tax free portion of payments b. Tax free portion of payments c. Tax free portion of payments Amount

Determine the tax-free amount of the monthly payment in each of the following instances. Use the life expectancy tables. Use Table Table III and Table V. Required: a. Person A is age 59 and purchased an annuity for $84,000. The annuity pays $800 per month for life. Note: Round exclusion percentage computation to one decimal place. b. Person B is 68 and purchased an annuity for $82,000. The annuity pays $1,050 per month for life. Note: Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places. c. Person C is 61 and purchased an annuity for $42,000 that pays a monthly payment of $650 for 10 years. Note: Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places. a. Tax free portion of payments b. Tax free portion of payments c. Tax free portion of payments Amount

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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refers to receiving a set monthly payment for the rest of your life. O Certain Period Annuity O Single Life Annuity O Joint & Survivor Annuity O Lump-sum Annuity
Age 60 61 62 63 65 66 67 64 68 69 80 81 82 70 71 83 84 85 86 87 88 89 90 72 73 74 75 76 77 78 79 Table I (Single Life Expectancy) (For Use by Beneficiaries) Life Expectancy 27.1 26.2 25.4 24.5 23.7 22.9 22.0 21.2 20.4 19.6 18.8 18.0 17.2 16.4 15.6 14.8 14.1 13.3 12.6 11.9 11.2 10.5 9.9 9.3 8.7 8.1 7.6 7.1 6.6 6.1 5.7 Age 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120+ Life Expectancy 5.3 4.9 4.6 4.3 4.0 3.7 3.4 3.2 3.0 2.8 2.6 2.5 2.3 2.2 2.1 2.1 2.1 2.0 2.0 2.0 2.0 2.0 1.9 1.9 1.8 1.8 1.6 1.4 1.1 1.0
The difference between a Roth IRA and a traditional IRA is that in a Roth IRA taxes are paid on the income that is contributed, but the withdrawals at retirement are tax-free. In a traditional IRA, however, the contributions reduce your taxable income, but the withdrawals at retirement are taxable. Assume you plan to devote $5,000 to retirement savings in each year. You will retire in 30 years and expect to live for an additional 20 years after retirement. a. Assume the before-tax interest rate is 5%. What will be your after-tax 20-year retirement consumption stream if you choose to save in a traditional IRA? Assume your tax rate is fixed at 30%. (Round your answers to 2 decimal place.) > Answer is complete but not entirely correct. 20-year consumption stream (assuming monthly payouts) $ 27,462.69
The annual insurance premium on Maria's home is $1,958 and the annual property tax is $1,432. If her monthly principal and interest payment is $1,613, find the adjusted monthly payment including principal, interest, taxes, and insurance (PITI). PITI= $ (Round to the nearest cent as needed.)
Subject: accounting
Juanita paid a life insurer $60,100 in exchange for an immediate life annuity. Juanita will receive $600 per month from the insurer, and her life expectancy is 14 years. Assume that Juanita receives 12 monthly payments in the first year. How much taxable income must she report? (Round your answer to 2 decimal places)
A mother borrowed 244,635 with 0.14 compounded semi - annually and promised to pay the amount by 8 equal semi - annual installments which will start at the beginning of each period. Determine the semi - annual payment.
Kia deposited $1,100, at the BEGINNING of each year for 25 years in a credit union account. If the account paid 8% interest, compounded annually, use the appropriate formula to find the future value of her account. A. $73,441.24 B. $80,416.53 C. $86,849.86 D. $87,949.86
A family takes a S275,000 20 year mortage at 3.50% annually compounded monthly. a. Compute their monthly payments. b. Immediately after the 121 payment, this family receives a $55,000 from an inheritance. They decide to put this entire amount against the amount they owe. Given that the bank expects them to maintain the same monthly payments as in 4a, compute the length of time (months) it will take to pay the laon off.
Determine the amount of the child- and dependent-care credit to which each of the following taxpayers is entitled. If an amount is zero, enter "0". Round intermediate computations and final answer to the nearest dollar. Note: Round your percentage computations up to the next whole number before using in credit dollar amount computations. a. Caryle and Philip are married and have a 4-year-old daughter. Their adjusted gross income is $47,600, and they pay $2,300 in qualified child-care expenses during the year. Caryle earns $17,100, and Philip earns $30,500 in salary. $fill in the blank 1 b. Natalie is a single parent with an 8-year-old son. Her adjusted gross income is $25,000, and she pays $3,190 in qualified child-care expenses. $fill in the blank 2 c. Leanne and Ross are married and have three children, ages 6, 4, and 1. Their adjusted gross income is $77,000, and they pay $6,340 in qualified child-care expenses during the year. Leanne earns $47,600, and Ross earns…
Daniel purchases a perpetuity with varying annual payments made in arrears. During the first 5 years, the payments are constant and equal to 10 per year. Beginning in year 6, the payments start to increase. For year 6 and all subsequent years, the payment in that year is p% larger than the payment in the year immediately preceding that year, where p < 9.2. At an annual effective interest rate of 9.2%, the perpetuity has a present value of 167.50. Calculate p, to 2 decimal places.
The annual insurance premium on Maria's home is $1,986 and the annual property tax is $1,407. If her monthly principal and interest payment is $1,623, find the adjusted monthly payment including principal, interest, taxes, and insurance (PITI). PITI = S (Round to the nearest cent as needed.)

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