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 65 and purchased an annuity for $101,000. The annuity pays $2,500 per month for life. Note: Round exclusion percentage computation to one decimal place. b. Person B is 69 and purchased an annuity for $99,000. The annuity pays $1,900 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 58 and purchased an annuity for $59,000 that pays a monthly payment of $1,500 for 15 years. Note: Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places. Tax free portion of payments Tax free portion of payments 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 65 and purchased an annuity for $101,000. The annuity pays $2,500 per month for life. Note: Round exclusion percentage computation to one decimal place. b. Person B is 69 and purchased an annuity for $99,000. The annuity pays $1,900 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 58 and purchased an annuity for $59,000 that pays a monthly payment of $1,500 for 15 years. Note: Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places. Tax free portion of payments Tax free portion of payments 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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Similar questions

The difference between an ordinary annuity and an annuity due is that each of the payments of the annuity due earns interest for one additional year (period). * True False
Individual Retirement Accounts (LO 5.3) Mindy has a Roth IRA held longer than 5 years to which she has contributed $30,000. The IRA has a current value of $62,000. Mindy is 55 years old and she takes a distribution of $40,000 after retiring on disability. How much of the distribution will be taxable to Mindy? a.$8,000 b.$40,000 c.$0 d.$30,000 e.Some other amount
A personal account earmarked as a retirement supplement contains $292,100. Suppose $250,000 is used to establish an annuity that earns 4%, compounded quarterly, and pays $6500 at the end of each quarter. How long will it be until the account balance is $0? (Round your answer UP to the nearest quarter.)
6. An employee, who had been with the company for 6 years, passed away on August 31, 2021. She had been earning a monthly salary of $5,900 and had regular CPP and El deductions taken off this salary on every cheque up to and including her August 31 payment. Calculate: a) Her maximum CPP contribution for the year. b) How much should be refunded to her estate, if any? cpp rate 5.45% cpp annual basic exemption $3,500 maximum insurable earnings $56,300 premium rate 1.58% Maximum annual employee premium $889.54
1.PLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULASA person substitutes a total insurance policy of $300,000.00 for an annuity, with the condition that it will be paid to him or his heirs for 25 years. If the insurance company operates at 7¼% interest, find the value of the annuity, the amount of total interest, and the effective rate. Note:In the image, this is the original exercise, it is in Spanish, but it is easy to understand. Very important Note:It is necessary that you make a solution approach and then the result. Above all, to check the procedure and/or the formulas used, especially when you use excel.
Anny’s full retirement age is 66 years and 2 months. Her PIA at full retirement age is $1200. She wants to retire early and receive the benefit at age 63. (a). How many months does she retire earlier than full retirement age (in months). __________months (b).What's the percentage of reduction in her retirement benefit (in %, keep two decimals if applicable). __________% (c). What’s her monthly benefit if she retires early and starts to receive the benefit at age 63 (in $, keep two decimals if applicable)? $_____________
(Annuity payments) Lisa Simpson wants to have $1,300,000 in 35 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 11.75 percent annually. What must Lisa's annual deposit be? Question content area bottom Part 1 The amount of Lisa's annual deposit must be $ enter your response here. (Round to the nearest cent.)
Kia deposited $1,300, at the BEGINNING of each year for 26 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. $95,037.72$103,940.74 $112,256.00$113,556.00
1. Louisa is 72 years old. She purchased an annuity in January of 2021 that will pay her $1,500 per month for the rest of her life. Louisa paid $200,000 for the annuity. What is the expected value of Louisa’s annuity? a. $18,000 b. $21,900 c. $200,000 d. $262,800 e. Not able to be determined from this information
Consider an inheritance that pays the beneficiary an annuity of $500 that begins immediately (an annuity due) and then annually in year 1 through year 17 (for a total of 18 years) with one exception - the payment in year 12, and only 12, is not $500 but $0. Using an interest rate of 3%, determine the present value of this cash flow stream.
7. Taxpayer, age 68, just purchased an annuity contract at a cost of $100,000. Assume that the annuity will pay Taxpayer $600 per month for life. How much each year may Taxpayer exclude? A B C DE $7,890 3,600 7,200 1,600 None of the above
Aa.51.

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