You have $3,000 of after-tax income that you invest in a Traditional IRA. Recall that contributions to Traditional IRAs are tax deductible, i.e., you are investing pre-tax dollars. The investment earns a 10% return and you will withdraw the money as a lump-sum in 30 years while in retirement (after age 59.5). Your current marginal tax rate is 30% and your marginal tax rate in retirement will be 20%. How much will be your after-tax withdrawal? Group of answer choices $59,827 $41,879 $74,783 $36,644

Q: E3-15. A taxpayer is about to receive a $1,000 bonus from her employer. She would like to put this…

A: Taxpayers get deductions for putting money in the account for retirement. There are two types of…

Q: uit buying vendor coffee for one year $4,483.97 and decided to contribute $2,400 (you saved $200 per…

A: The value of the money at retirement is the future value of the savings.

Q: Assume that you begin saving 3% of your total income in an employer-provided retirement plan at…

A: The savings of the employee are increasing by fix rate of 2% each year, while the income is…

Q: ou want to be able to withdraw $50,000 from your account each year for 20 years after you retire.…

A: There is need of planning for the retirement and that should be done on time to have good retirement…

Q: subsequent year until your 85th birthday. On that birthday you want to give $1,000,000 to your…

A: The time value of money acknowledges that, because of prospective earning potential, inflation, and…

Q: You have just made your first $5461 contribution to your retirement account. Assume you earn a…

A: Simple interest is the amount of interest earned on saving or investing some particular amount. This…

Q: Someone in the 36 percent tax bracket can earn 7 percent annually on her investments in a tax-exempt…

A: Here,One Time Investment is $18,000Tax Rate is 36%Interest Rate is 7%

Q: The difference between a Roth IRA and a traditional IRA is that in a Roth IRA taxes are paid on the…

A: IRA TYPE TAX DEDUCTION INITIALLY TAX DEDUCTION AT RETIREMENT TRADITIONAL NO YES…

Q: 129,000 annual income. Your company matches 75 percent of the first 10 percent of your earnings. You…

A: 401(K) is one of the profit sharing plan in which there is contribution from employee and also…

Q: Kun is thinking about investing $4,000 at the end of each year for 30 years in a tax-sheltered…

A: Annual investment (P) = $ 4,000 Interest rate (r) = 8.5% Number of annual deposits (n) = 30

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: As per IRS guidelines, federal income tax is applicable to individuals, corporations, trusts, and…

Q: After retirement, you expect to live for 25 years. You would like to have a $95,000 income each…

A: Here,

Q: A self-employed person deposits $2,000 annually in a retirement account (called a Keogh or H.R. 10…

A: The future value formula can be used to derive the future value of a present sum or a stream of…

Q: You have $780, 000 in your retirement fund. Assuming no interest is being earned, how many dollars…

A: Monthly Withdrawal= (Initial Retirement Fund)/(Number of Months in 20 Years)Monthly Withdrawal=…

Q: Suppose you plan on retiring at the age of 35 (early retirement woooooooo!) and expect to live…

A:

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: Tax savings is the reduction in the amount of income tax that an individual or entity is required to…

Q: You are 40 years old and want to retire at age 60. Each year, starting one year from now, you will…

A: An annuity is a financial product or contract that provides a series of regular payments to an…

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: A drop in the level of tax paid by a citizen, corporation, or other taxpayer is alluded to as a tax…

Q: At the end of this year, you intent to contribute $5000 to your retirement account. You are…

A: This is a case of growing annuity. An annuity refers to a stream of cash flows occurring repeatedly…

Q: individual earns an extra $1000 each year and places this money at the end of each year into an…

A: Solved using Financial Calculator  PMT = -1000 I/Y = 7.5 N =50 CPT FV = $ 482,529.95

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: (a) How much tax do you save (in $) each year by making the retirement fund contributions?The tax…

Q: You choose to invest your $3,435 income tax refund check (rather than spend it) in an account…

A: Investment (PV) = $3,435 Interest rate (r) = 6% Period (t) = 30 Years

Q: Assume that you are 30 years old today, and that you are planning on retirement at age 65. Your…

A: The present value (PV) of a future sum of money or stream of cash flows is the current value,…

Q: You wish to retire after 22 years; at which time you want to have accumulated enough money to…

A:

Q: An individual earns an extra $2500 each year and places this money at the end of each year into an…

A: INTEREST RATE 8.70% PERIOD (YEARS) 45 PMT (ANNUAL EARNINGS) 2500 PRESENT VALUE $0

Q: An individual earns an extra $2000 each year and places this money at the end of each year into an…

A: Time value of money (TVM) is used to measure the value of money at different point of time in the…

Q: Lifetime savings accounts, known as LSAS, allow people to invest after-tax money without being taxed…

A: The balance in the account will be calculated using the formula future value of annuity deposit.…

Q: You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and…

A: Since, in this question fixed amount is invested each year. So, it is the question of annuity.…

Q: You annually Invest $1,500 in an individual retirement account (IRA) starting at the age of 20 and…

A: Time value of money is a financial concept which is used to calculate the value of money in present…

Q: Someone in the 36 percent tax bracket can earn 8 percent annually on her investments in a tax-exempt…

A: Here,One Time Invetsment is $13,000Tax Rate is 36%Interest Rate is 8%

Q: By the end of this year you would be 35 years old and you want to plan for your retirement. You wish…

A: Retirement account interest = 7% Period of retirement account = 30 years Annual coupon = 6% Annuity…

Q: You want to be able to withdraw $50,000 from your account each year for 25 years after you retire.…

A: Here, Annual amount to withdraw = $50,000 Time in years after retirement = 25 years Time to…

Q: How much tax do you save (in $) each year by making the retirement fund contributions? $ (b) Using…

A: Tax savings amount is the amount which has been saved by the taxpayer by making such types of…

Q: he difference between a Roth IRA and a traditional IRA is that in a Roth IRA taxes are paid on the…

A: Future valueWith equal periodic deposit or annuity (PMT), periodic interest rate (r) and period (n),…

Q: You choose to invest your $3,410 income tax refund check (rather than spend it!) in an account…

A: Given, P = $3410 r = 5% n = 30 years

Q: You have just made your first $4,500 contribution to your individual retirement account. Assume you…

A: Given the following:  First contribution, PV = $4,500  Interest rate, r = 11.3%  Period, n = 39…

Q: Suppose you are a manager for a certain company. You earn $50,000 per year and are in the 28%…

A: Future value of annuity = annuity * Table factor (r, n) Tax savings = Investment in IRA * marginal…

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.