PUBLIC FINANCE
10th Edition
ISBN: 9781265977177
Author: ROSEN
Publisher: MCG
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Chapter 14, Problem 2DQ
Summary Introduction
To determine: Whether there is a tax progressiveness for the two people in a society.
Expert Solution & Answer
Explanation of Solution
According to Person X the taxes will not be progressive, if the rich as well as the poor has lost the similar amount of utility, then the payment made by the rich person will be higher because of the
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Pam and Jim are saving money for their two children who they plan to send to university.The eldest child will enter university in 5 years while the younger will enter in 7 years. Each child is expected spend four years at university. University fees are currently R20 000 per year and are expected to grow at 5% per year. These fees are paid at the beginning of each year.Pam and Jim currently have R40 000 in their savings and their plan is to save a fixed amount each year for the next 5 years. The first deposit taking place at the end of the current year and the last deposit at the date the first university fees are paid.Pam and Jim expect to earn 10% per year on their investments.What amount should they invest each year to meet the cost of their children’s university fees?
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Chapter 14 Solutions
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