(a) Explanation Given: The marginal tax rate is 35%, deferred contribution is $1500, rate of return is 6% and number of years is 10. Formula used: V = ( 1 − t ) R [ ( 1 + r ) n − 1 ] r . R is regular deferred contribution, r is the rate of return, t is the marginal tax rate and n is the number of years. Calculation: To compute the final value of paid taxes when all the taxes are deferred, the following formula is used: V = ( 1 − t ) R [ ( 1 + r ) n − 1 ] r = ( 1 − 0 (b) To determine To calculate: The final value after the tax payment when the taxes are not deferred if the marginal tax rate is 35%, deferred contribution is $1500, rate of return is 6% and number of years is 10.

Mathematical Ideas (13th Edition) - Standalone book

13th Edition

ISBN: 9780321977076

Author: Charles D. Miller, Vern E. Heeren, John Hornsby, Christopher Heeren

Publisher: PEARSON

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Chapter 13.5, Problem 61E

(a)

To determine

To calculate: The final value after the tax payment when the taxes are deferred if the marginal tax rate is 35%, deferred contribution is $1500, rate of return is 6% and number of years is 10.

(b)

To determine

To calculate: The final value after the tax payment when the taxes are not deferred if the marginal tax rate is 35%, deferred contribution is $1500, rate of return is 6% and number of years is 10.

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Chapter 13.5, Problem 60E

Chapter 13.5, Problem 62E

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Chapter 13 Solutions

Mathematical Ideas (13th Edition) - Standalone book

Ch. 13.1 - In the following exercises, assume whenever...Ch. 13.1 - In the following exercises, assume whenever...Ch. 13.1 - In the following exercises, assume whenever...Ch. 13.1 - In the following exercises, assume whenever...Ch. 13.1 - In the following exercises, assume whenever...Ch. 13.1 - In the following exercises, assume whenever...Ch. 13.1 - Find the future value of each deposit if the...Ch. 13.1 - Find the future value of each deposit if the...Ch. 13.1 - Find the future value of each deposit if the...Ch. 13.1 - Find the future value of each deposit if the...

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The final value after the tax payment when the taxes are deferred if the marginal tax rate is 35%, deferred contribution is $1500, rate of return is 6% and number of years is 10.

Solution Summary: The author calculates the final value after the tax payment when the taxes are deferred if the marginal tax rate is 35% and the rate of return is 6%.

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To calculate: The final value after the tax payment when the taxes are deferred if the marginal tax rate is 35%, deferred contribution is $1500, rate of return is 6% and number of years is 10.

To calculate: The final value after the tax payment when the taxes are not deferred if the marginal tax rate is 35%, deferred contribution is $1500, rate of return is 6% and number of years is 10.

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Chapter 13 Solutions