Answered: Nicholas is 25 years old. He earns… | bartleby

Income Tax Fundamentals 2020

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter7: Tax Credits

Section: Chapter Questions

Problem 12MCQ

See similar textbooks

Related questions

Question

4

Nicholas is 25 years old. He earns $10,000 a year while completing grad
school. He does not need any of this money for expenses (takes low
interest Federal student loans and grants to cover all expenses) if he
funds a Roth IRA for each the next 3 years at the maximum, how much
will he have at age 60 if the he averages 7.0% annual return until age 60?
(exclude "$" sign and round to nearest whole dollar)
155,272

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Blurred answer

Similar questions

Daniel knows that he can withdraw up to a maximum of $35,000 from his Registered Retirement Savings Plan (RRSP) under the Home Buyers Plan (HBP). He knows that he has to pay at least 1/15th of the amount that he borrows. Danieľ's RRSP market value is $45,680 on the day that he decides to withdraw $25,700 under the HBP for the down payment on his new home. What is the minimum annual amount that Daniel must repay to his RRSP on the amount he withdraws from the HBP? A $3,045.33 В $2,333.33 $5,000.00 D $1,713.33 E $3,433.33
ss
Douglas needs to borrow $15,600 today for his tuition bill. He agrees to pay back the loan in a lump-sum payment five years from now, after he is out of college. He bank states that the payment will need to be $19, 683. If Douglas borrows the $15,600 from the bank, what interest rate is he paying on his loan?
Rhett is about to begin college (4-year) and has received a 10-year $7,500 Federal Direct Unsubsidized Loan with an interest rate of 6.4%. He will be required to begin making payments six months after graduation. If Rhett decides to capitalize the interest (which totals $2,160) from the time he receives the funds until he begins making payments in 4.5 years, how much total interest would he pay on this loan?
Jim, aged 62, was retrenched and has been unemployed for ten months, but is still looking for work. He has $620,000 in super and, based on advice received, decides to purchase a 4 - year annuity of $24,000 p.a. payable monthly and indexed at 3% p.a. He can obtain this at a yield of 5.1% from a commercial provider. How much does Jim's annuity cost to purchase?
An individual is considering contributing $4,000 per year to either a traditional or a Roth IRA. Payments would begin in one year. If she uses the traditional IRA, her contributions would be fully deductible. She is 40-years old and is in a 28 percent tax bracket. On either IRA she can earn 7 percent. When she retires at age 65, she believes she will be in a 15 percent tax bracket. She invests not only the $4,000 per year, but any tax savings due to the deductibility of her contributions in a taxable investment earning a pretax rate of 7 percent. She will withdraw all her money upon retirement and may owe taxes then, depending on the type of IRA chosen. What is the after-tax future value of the traditional IRA including the invested tax deductions? Group of answer choices $237,545.47 $268,796.81 $215,046.73 $245,384.26 $252,996.15
Alex wants to provide funding in the event of his death for his daughter Ellie, age 8, to attend four years of college, starting at age 18. The current annual cost of tuition is $20,000. Assume inflation of 6.5% and after-tax earnings of 7%. If Alex wants to have enough life insurance to assure adequate funds for Ellie when she begins college (should he die today), approximately how much insurance should he have for this need alone? (Round your answer to the nearest dollar.) A)$113,764 B)$75,806 C)$75,451 D)$79,441
D’von works for a company that matches his 401(k) retirement contributions at a rate of “$0.50 per $1” of his contributions, up to 6% of his salary. D’von earns $60,000/year. Using Uncle Al’s advice, what is the minimum amount of salary that D’von should contribute to his 401(k) plan each year? A. $3,600 B. $7,200 C. $9,600 D. $18,000
David Abbot is buying a new house, and he is taking out a 30-year mortgage. David will borrow $201,000 from a bank, and to repay the loan he will make 360 monthly payments (principal and interest) of $1,158.97 per month over the next 30years. David can deduct interest payments on his mortgage from his taxable income, and based on his income, David is in the 32% tax bracket. a. What is the before-tax interest rate (per year) on David's loan? b. What is the after-tax interest rate that David is paying?
John is trying to decide whether to contribute to a Roth IRA or a traditional IRA. He plans on making a $5,000 contribution to whichever plan he decides to fund. He currently pays tax at a 32 percent marginal income tax rate, but he believes that his marginal tax rate in the future will be 28 percent. He intends to leave the money in the Roth IRA or traditional IRA for 30 years, and he expects to earn a 6 percent before-tax rate of return on the account. (Use Table 1.) Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Problem 13-78 Part b (Static) b. How much will John accumulate after taxes if he contributes to a traditional IRA (consider only the funds contributed to the traditional IRA)?
EZ Leifer plans to retire at the age of 65 and believes he will live to be90. EZ wants to receive an annual retirement payment of $50,000 at thebeginning of each year. He sets up a retirement account that is estimated toearn 6 percent annually.a. How much money must EZ have in the account when he reaches 65 yearsold?b. EZ is currently 29 years of age. How much must he invest in this accountat the end of each year for the next 36 years to have the required amount inhis account at age 65?
Bobby's parents loaned him $110,000 to fund his college education. His parents are not charging interest. They desire to be paid one lump sum of $110,000 when Bobby can accumulate that amount. Bobby established a savings plan that earns 4% compounded annually. His new job promises to pay an annual holiday bonus that will enable him to make equal annual, year-end deposits of $6500 starting next year. Approximately how many years will it take Bobby to accumulate the $110,000?

SEE MORE QUESTIONS

Recommended textbooks for you

Income Tax Fundamentals 2020

Income Tax Fundamentals 2020

Accounting

ISBN:

9780357391129

Author:

WHITTENBURG

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Comprehensive Volume 2019

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

Income Tax Fundamentals 2020

Income Tax Fundamentals 2020

Accounting

ISBN:

9780357391129

Author:

WHITTENBURG

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Comprehensive Volume 2019

SWFT Comprehensive Volume 2019

Accounting

ISBN:

9780357233306

Author:

Maloney

Publisher:

Cengage

SWFT Comprehensive Vol 2020

SWFT Comprehensive Vol 2020

Accounting

ISBN:

9780357391723

Author:

Maloney

Publisher:

Cengage

SWFT Individual Income Taxes

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

SEE MORE TEXTBOOKS