QUESTION S Matthew (48 at year-end) develops cutting-edge technology for SV, Inc. located in Silicon Valley. In 2021, Matthew participates in SV's money purchase pension plan (a defined contribution plan) and in his company's 401(k) plan. Under the money purchase pension plan, SV contributes 15 percent of an employee's salary to a retirement account for the employee up to the amount limited by the tax code. Because it provides the money purchase pension plan, SV does not contribute to the employee's 401(k) plan. Matthew would like to maximize his contribution to his 401(k) account after SV's contribution to the money purchase plan. Assuming Matthew's annual salary is $255,000, what can Matthew contribute to his 401(k) account in 2021?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please answer within 30 minutes. Please answer both the questions. Its urgent.

QUESTION 5
Matthew (48 at year-end) develops cutting-edge technology for SV, Inc. located in Silicon Valley. In 2021, Matthew participates in SV's
money purchase pension plan (a defined contribution plan) and in his company's 401(k) plan. Under the money purchase pension plan, SV
contributes 15 percent of an employee's salary to a retirement account for the employee up to the amount limited by the tax code. Because
it provides the money purchase pension plan, SV does not contribute to the employee's 401(k) plan. Matthew would like to maximize his
contribution to his 401(k) account after SV's contribution to the money purchase plan. Assuming Matthew's annual salary is $255,000, what
can Matthew contribute to his 401(k) account in 2021?
QUESTION 6
In 2021, Nina contributes 10 percent of her $100,000 annual salary to her 401(k) account. She expects to earn a 8 percent before-tax rate of return. Assuming she
leaves this in the account until she retires in 25 years, what is Nina's after-tax accumulation from her 2021 contributions to her 401(k) account? Assume Nina's marginal
tax rate at retirement is 25 percent
Transcribed Image Text:QUESTION 5 Matthew (48 at year-end) develops cutting-edge technology for SV, Inc. located in Silicon Valley. In 2021, Matthew participates in SV's money purchase pension plan (a defined contribution plan) and in his company's 401(k) plan. Under the money purchase pension plan, SV contributes 15 percent of an employee's salary to a retirement account for the employee up to the amount limited by the tax code. Because it provides the money purchase pension plan, SV does not contribute to the employee's 401(k) plan. Matthew would like to maximize his contribution to his 401(k) account after SV's contribution to the money purchase plan. Assuming Matthew's annual salary is $255,000, what can Matthew contribute to his 401(k) account in 2021? QUESTION 6 In 2021, Nina contributes 10 percent of her $100,000 annual salary to her 401(k) account. She expects to earn a 8 percent before-tax rate of return. Assuming she leaves this in the account until she retires in 25 years, what is Nina's after-tax accumulation from her 2021 contributions to her 401(k) account? Assume Nina's marginal tax rate at retirement is 25 percent
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