5. Suppose the average Social Security benefits in the nation are $12,000 per year. The number of Social Security pension recipients is currently 50 million. There are 150 million workers in the workforce this year and the average taxable wage per worker is $25,000 per year. a. Calculate the dependency ratio for the nation. b. Calculate the average replacement rate for Social Security retirees. c. Calculate the tax rate on wages necessary to pay Social Security benefits this year assuming the system is operating on a pay-as-you-go basis.

5. Suppose the average Social Security benefits in the nation are $12,000 per year. The number of Social Security pension recipients is currently 50 million. There are 150 million workers in the workforce this year and the average taxable wage per worker is $25,000 per year. a. Calculate the dependency ratio for the nation. b. Calculate the average replacement rate for Social Security retirees. c. Calculate the tax rate on wages necessary to pay Social Security benefits this year assuming the system is operating on a pay-as-you-go basis.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section5.A: Continous Compounding And Discounting

Problem 1P

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