Answered: The AGI of the Newtons

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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The AGI of the Newtons, a married couple, is $210,000 this year. They would like to contribute to a Roth IRA.

Round any division to two decimal places. Round final answer to the nearest dollar.

What is the maximum amount this couple can contribute to a Roth IRA?

Suppose that the Newtons will report AGI of less than $204,000 and put $12,000 each year into their Roth IRA for 10 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 10 years is 12.5779.

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