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The AGI of the Newtons, a married couple, is $207,000 this year. They would like to contribute to a Roth IRA. a. What is the maximum amount this couple can contribute to a Roth IRA? 12,000 b. Suppose that the Newtons will report AGI of less than $204,000 and put $12,000 each year into their Roth IRA for 20 years, earning an annual return of 5%. What future value will accumulate in their Roth IRA at the end of this period? The future value of an ordinary annuity at 5% for 20 years is 33.0660. 290,579

The AGI of the Newtons, a married couple, is $207,000 this year. They would like to contribute to a Roth IRA. a. What is the maximum amount this couple can contribute to a Roth IRA? 12,000 b. Suppose that the Newtons will report AGI of less than $204,000 and put $12,000 each year into their Roth IRA for 20 years, earning an annual return of 5%. What future value will accumulate in their Roth IRA at the end of this period? The future value of an ordinary annuity at 5% for 20 years is 33.0660. 290,579

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 19-21 (LO. 6) The AGI of the Newtons, a married couple, is $207,000 this year. They would like to contribute to a Roth IRA. a. What is the maximum amount this couple can contribute to a Roth IRA? $ 12,000 b. Suppose that the Newtons will report AGI of less than $204,000 and put $12,000 each year into their Roth IRA for 20 years, earning an annual return of 5%. What future value will accumulate in their Roth IRA at the end of this period? The future value of an ordinary annuity at 5% for 20 years is 33.0660. $ 290,579
Transcribed Image Text:Exercise 19-21 (LO. 6) The AGI of the Newtons, a married couple, is $207,000 this year. They would like to contribute to a Roth IRA. a. What is the maximum amount this couple can contribute to a Roth IRA? $ 12,000 b. Suppose that the Newtons will report AGI of less than $204,000 and put $12,000 each year into their Roth IRA for 20 years, earning an annual return of 5%. What future value will accumulate in their Roth IRA at the end of this period? The future value of an ordinary annuity at 5% for 20 years is 33.0660. $ 290,579
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