Tiffany, a self-employed dentist, currently earns $100,000 per year. Tiffany has always been a self proclaimed saver, and saves 25% per year of her Schedule C net income. Assume Tiffany paid $13,000 in Social Security taxes. Tiffany plans to pay off her home mortgage at retirement and live debt free. She currently spends $25,000 per year on her mortgage. What do you expect Tiffany's wage replacement ratio to be at retirement based on the above information? 37.00%. O 59.70%. O 65.30%. 84.70%.
Q: Magdalena, age 35, has $72,000 accumulated in savings. She projects she will save $23,000 a year…
A: The amount you can put back or invest each period, as well as the interest you earn on your savings,…
Q: Alex makes $80,000 per year and pays about 30% of his gross monthly income in federal and state…
A: Federal and state tax are the mandatory deductions from the income. Income left after tax will be…
Q: at a biotechnology company. Janine estimates that she will need $943,000 in her total retirement…
A: The future value of an investment forecasts the expected value of an investment at a given future…
Q: Karla plans to retire at age 68, and estimates that $39,600 a year in retirement for 23 years will…
A: As per the given information: Current age = 29Retirement age = 68Time period for savings = 68-29 =…
Q: Amy Parker, a 22-year-old and newly hired marine biologist, has opened a 401(k) retirement plan…
A: The FV of an annuity refers to the accumulated worth of the cash flows assuming that they grow at a…
Q: Kim is trying to decide whether she can afford a loan she needs in order to go to chiropractic…
A: Debt Payments to income ratio (Without College Loan) = Debt/Net Income Debt Payments to income ratio…
Q: d Martha are twins, and just graduated from college. They plan to retire in 40 years. To that end,…
A: In order to answer the question, we must see the amount per month invested and for the period of…
Q: Jason has an opportunity to save $145 per month at an APR of 5.75% in a 401K plan through work. He…
A: 401K is retirement plan offered by different financial institution in which individuals make monthly…
Q: Molly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the…
A: 1. Accumulate amount is computed below: The formula sheet used for computing the above table as…
Q: Janine is 45 and has a good job at a biotechnology company. Janine estimates that she will need…
A:
Q: Determine Daniel's wage replacement ratio using the top-down approach (rounded to the nearest…
A: To determine the wage replacement ratio, we need to determine the payments as a % of the total…
Q: Rachel and Alexander Harrison need to calculate the amount they can afford to spend on their first…
A: Affordability ratio refers to the monthly expense that a person can afford out of his income.Monthly…
Q: expects to retire in 30 years. She has decided that she would like to retire with enough money in…
A: The present value of money to be received in the future would give the amount of retirement money…
Q: Peter and Paula are married. Paula earns $60,000 per year and Peter is currently staying home with…
A: The purpose of contributing to a retirement plan is to ensure that an individual has enough savings…
Q: 1) Sabrina waits to start saving for retirement until age 35. If she saves the same $8000 each year…
A: Annual saving (P) = $8000 Period from 35th year to 65th year (n) = 30 Interest rate (r) = 7.00%
Q: . His wage replacement ratio has been determined to be 72%. He expects inflation will average…
A: *Answer:
Q: enny, who is married and the mother of three, is 25 years old and expects to work until 70. She…
A: The life insurance is a protection for family members of insured as they received the insurance…
Q: Huey, Dewey and Louie are triplets. They are 25 years old and are trying to set up savings plans for…
A: Step 1: The question is based on the concept of time value of money, the value of money change with…
Q: You and your spouse are in good health and have reasonably secure jobs. Each of you makes about…
A: DINK refers to double income, no kids category of insured. In this time of insurance category, both…
Q: Trevor plans to retire at age 62, and estimates that $55,200 a year in retirement for 33 years will…
A: The savings each month during the time when Trevor is working and the monthly money required during…
Q: Agnes is 40 years old. She wants to know how much she should be saving each year for retirement.…
A: The value of money changes over time. The future value of a present amount is calculated by using an…
Q: An individual is considering contributing $4,000 per year to either a traditional or a Roth IRA.…
A: Roth IRA:A Roth IRA is a retirement account that allows individuals to contribute after-tax income,…
Q: Felice bought a duplex apartment at a cost of $210,000. Her mortgage payments on the property are…
A: Monthly rent refers to an amount that is paid every month by the tenant to the owner in return for…
Q: ang Daiyu expects to retire in 30 years. She has decided that she would like to retire with enough…
A:
Q: Martha and Jean are married and have 4-year old twins. Jean is going to school full-time for 9…
A: $900. Jean gets credit for $500, a month of earned income while she attends school for nine months,…
Q: The Allens are considering buying a house and need to figure out what they can afford and what a…
A: Back-end Debt to Income ratio computes all monthly payments as a % of the gross monthly income. We…
Q: Leticia is twenty-two years old and she has all of her savings in a Certificate of Deposit (CD. at…
A: The financial principle of investment revolves around balancing risk and return. Investors seek to…
Q: $2,500 per month. She has the following monthly debt payment expenses: $75 for credit cards, $125…
A: FHA provides the guidelines for the how much should be monthly income and housing expenses should…
Q: Molly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the…
A:
Q: Michelle, age 54, it's self-employed and has never made a lot of money. But, she is consistently…
A: Contribution made to IRA account is tax free and hence deposit made are quite useful in retirement…
Q: Jon, age 48, earns $65,000 per year from his employer. Jon saves $15,000 per year for retirement and…
A:
Q: Maria and Roberto Cruz's financial adviser told them they will need 80 percent of their…
A: In this question, we are required to determine the annual retirement income.
Q: Lily earns $80,000 a year and saves 14% of her annual gross income. Assume that Lily wants to…
A: Wage replacement ratio means the percentage of current pre-tax income that a person will need to…
Q: Nancy is a widow with two teenage children. Nancy's gross income is 54200 per month, and taxes take…
A: Insurance Nancy should purchase=annual disposable income *8 times= Gross Annaul Income * (1-Taxes)*…
Q: Dianne earns 19,600 per year. Her employer deducts 2,800 per year for income and social security…
A: Net annual income is the total income an individual or entity earns over the course of a year after…
Q: Madeline Rollins is trying to decide whether she can afford a loan she needs in order to go to…
A: The Debt-to-Income (DTI) ratio is a financial metric that expresses the relationship between an…
Q: Tina has saved $23000 from her summer jobs. Rather than work for a living, she plans to buy an…
A: First, subtract the airfare from her savings to find out how much she can invest in the…
Q: Janine is 25 and has a good job at a biotechnology company. She currently has $5,000 in an IRA, an…
A: Here, Current Age of J is 25 Retirement Age is 65 Time Period will be: =65-25 =40 years Current…
Q: He earns 9% on his investments, and inflation has averaged only 3% annually. Assuming he is expected…
A: In today life retirement planning is very important and that should be done on the basis of…
Q: A mother earned $18750.00 from royalties on her cookbook. She set aside 20% of this for a down…
A: The interest earned from all the categories of investment that a single investor has made is known…
Q: Joetta Hernandez is a single parent with two children and earns $67,500 a year. Her employer's…
A: As per the given information: Earning = $67,500 Employer's group life insuarnce policy would pay -…
Q: Amy Parker, a 22-year-old and newly hired marine biologist, has opened a 401(k) retirement plan with…
A: Fixed installment = $ 2,400 Rate of interest= 7% Growth rate = 4% Number of installments(Time…
Q: grow at an annual rate of 6 percent, and she plans to leave it untouched until she retires at age…
A: The future value of an investment forecasts the expected value of an investment at a given future…
Q: Susan's annual salary is $50,000. She contributes 10% of her salary to her 401(k) plan; and her…
A: The percentage of disposable income that people or families choose to save over spend is referred to…
Step by step
Solved in 3 steps
- Anita and Jim are considering a home equity loan to build a nice deck and patio in their back yard. They want to borrow $35,000 and are quoted an APR of 10%. If their marginal tax bracket is 24%, how much money can they save in taxes each year if capitalize on the tax-deductibility of interest paid on the home equity loan?Marie wants to provide retirement income for her dependent parents for 35 years should she die. Marie earns $67,500 and feels that her parents could live on 65% of that amount. If the insurance funds could be invested at 5%, how much life insurance does she purchase using the desired income method? Group of answer choices $1,273,499 $1,450,087 $932,743 $877,500John 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)?
- Madeline Rollins is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Madeline is living at home and works in a shoe store, earning a gross income of $960 per month. Her employer deducts a total of $170 for taxes from her monthly pay. Madeline also pays $115 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $170 per month. Calculate her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers as a percent rounded to 2 decimal places.) With college loan Without college loan Debt Payments-to- Income RatioMolly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $3,500 per year for her retirement fund and assumes that she'll retire at age 65. How much will Molly have accumulated when she turns 65 if she invests in equities and earns 8 percent on average? Round your answer to the nearest dollar. Molly is urging her friend, Isaac Stein, to start his plan right away, too, because he's 45. What would his nest egg amount to if he invested in the same manner as Molly and he, too, retires at age 65? Round your answer to the nearest dollar. 2a. Nest egg at 4% 2b. Nest egg at 8%Marc has nothing saved for retirement. He wants to receive $46,000.00 per year for 5 years during retirement. The first of these payments will be received in 7 years. Marc can earn a return of 9.38 percent per year. How much does Marc need to save each year for 6 years to have exactly enough to meet his retirement goal if he makes his first annual savings contribution in 1 year and all savings contributions are equal? O $21,324.88 (plus or minus 10 dollars) O $25,513.05 (plus or minus 10 dollars) O $23,325.15 (plus or minus 10 dollars) O $20,819.31 (plus or minus 10 dollars) O none of the answers are within 10 dollars of the correct answer
- Mark makes $82,420 per year and pays about 23% of his gross monthly income in federal and state taxes. He wants to find an apartment to rent. Estimate how much he can afford to pay for rent each month. Then determine how much money he will have after taxes and rent are paidRuby is 25 and has a good job at a biotechnology company. She currently has $10,400 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 8 percent, and she plans to leave it untouched until she retires at age 65. Ruby estimates that she will need $875,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $20,000 a year (she expects that Social Security will pay her an additional $15,000 a year). a. How much will Ruby's IRA be worth when she needs to start withdrawing money from it when she retires? Use Exhibit 1-A (Round FV factor to 3 decimal places and final answer to the nearest whole dollar.) Future value of IRA b. How much money will she have to accumulate in her company's 401(k) plan over the next 40 years in order to reach her retirement income goal? (Round your answer to the nearest whole dollar.) Required future value of 401(k)Courtney wants to retire in 15 years when she turns 62. She wants to have enough money to replace 75% of her current income less what she expects to receive from Social Security at the beginning of each year. Courtney expects to receive $25,714 per year from Social Security in today’s dollars at full retirement age of 67. However, she will take Social Security early at age 62, when she retires. Courtney is aggressive and wants to assume an 8% annual investment rate of return and that inflation will be 3% per year. Based on her family history, Courtney expects that she will live 30 years in retirement (age 92). If Courtney currently earns $80,000 per year and she expects her raises to equal the inflation rate, how much does she need at retirement to fulfill her retirement goals? $874,794. $1,022,807. $1,072,458. $1,583,152.
- You and your spouse are in good health and have reasonably secure careers. You make about $75,500 annually and have opted for life insurance coverage of three times your salary through your employer. With your spouse's income, you are able to absorb ongoing living costs of $55,500 a year. You own a home with a $290,500 mortgage. Other debts include a $15,250 car loan, $7,100 student loan, and $4,050 charged to credit cards. In the event of your death, you wish to leave your family debt- free. One of your most important financial goals involves building an education fund of $101,000 to cover the costs of a four-year university program for each of your two children ages two and four. To date, you have accumulated $25,500 toward this goal in an RESP. Should you die, your beneficiaries would receive a $2,500 death benefit lump-sum payment from the Canada Pension Plan. You also have $35,500 in your company pension plan. Average funeral expenses are $13,600. Your other financial assets are…You will need a calculator for this problem. Sanchez earns $4,000, and she wants to save it for retirement, which is 10 years away. She can either save it in a taxable account or put it into a Roth IRA. Suppose that Sanchez can receive an annual rate of return of 8 percent and her marginal tax rate is 25 percent. By the time she reaches retirement, how much money would she have in either option? [Note: Sanchez has to pay tax on the $4,000, so she cannot put the full amount either into the taxable account or the Roth IRA.]Bertha and Martha are twins, and just graduated from college. They plan to retire in 40 years. To that end, each has a 401-k tax-advantaged retirement account. Martha contributes $1,000 per month only for the first five years. Bertha does not contribute during the first 20 years but contributes $2,500 per month during the last 20 years. 14) How much would Martha’s account hold at retirement if she earned an annual rate of 11.5%? A) $3,347,918.85 B) $1,940,849.36 C) $2,999,789.12 *D) $4,425,537.6. First compute the FV of the 60-month annuity and then compound the lump-sum for the next 420 months. Use a periodic rate. 15) 15) How much would Bertha’s account hold at retirement if she also earned an annual rate of 11.5%? A) $3,350,918.25 *B) $2,312,752.65 C) $1,978,400.10 D) $2,711,542.16. Please show the work step by step through financial calculator.