Your company sponsors a 401(k) plan into which you deposit 10 percent of your $132,000 annual income. Your company matches 75 percent of the first 10 percent of your earnings. You expect the fund to yield 10 percent next year. Assume you are currently in the 31 percent tax bracket. a. What is your annual investment in the 401(k) plan? (Round your answer to the nearest whole number. (e.g., 32)) b. What is your one-year return? (Round your answer to 3 decimal places. (e.g., 32.161))
Your company sponsors a 401(k) plan into which you deposit 10 percent of your $132,000 annual income. Your company matches 75 percent of the first 10 percent of your earnings. You expect the fund to yield 10 percent next year. Assume you are currently in the 31 percent tax bracket. a. What is your annual investment in the 401(k) plan? (Round your answer to the nearest whole number. (e.g., 32)) b. What is your one-year return? (Round your answer to 3 decimal places. (e.g., 32.161))
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Your company sponsors a 401(k) plan into which you deposit 10
percent of your $132,000 annual income. Your company matches 75
percent of the first 10 percent of your earnings. You expect the fund to
yield 10 percent next year. Assume you are currently in the 31 percent
tax bracket.
a. What is your annual investment in the 401(k) plan? (Round your
answer to the nearest whole number. (e.g., 32))
b. What is your one-year return? (Round your answer to 3 decimal
places. (e.g., 32.161))
a. Annual investment
b. One-year return
%
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