Your company sponsors a 401(k) plan into which you deposit 12 percent of your $60,000 annual income. Your company matches 50 percent of the first 5 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 the total annual investment in the 401(k) plan at year-end? (Round your answer to the nearest whole number. (e.g., 32)) b. What is your one-year return? (Round your answer to 2 decimal places. (e.g., 32.16)) a. Annual investment b. One-year return
Your company sponsors a 401(k) plan into which you deposit 12 percent of your $60,000 annual income. Your company matches 50 percent of the first 5 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 the total annual investment in the 401(k) plan at year-end? (Round your answer to the nearest whole number. (e.g., 32)) b. What is your one-year return? (Round your answer to 2 decimal places. (e.g., 32.16)) a. Annual investment b. One-year return
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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am. 121.
Transcribed Image Text:Your company sponsors a 401(k) plan into which you deposit 12 percent of your $60,000 annual income. Your company matches 50
percent of the first 5 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 the total annual investment in the 401(k) plan at year-end? (Round your answer to the nearest whole number. (e.g., 32))
b. What is your one-year return? (Round your answer to 2 decimal places. (e.g., 32.16))
a. Annual investment
b. One-year return
%
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