Someone in the 15 percent tax bracket can earn 8 percent annually on his investments in a tax-exempt IRA account.Now let’s assume the 8 percent investment is taxable rather than tax-deferred. What will be the after-tax value of his $10,000 investment after five years (assuming annual compounding)?

Someone in the 15 percent tax bracket can earn 8 percent annually on his investments in a tax-exempt IRA account.Now let’s assume the 8 percent investment is taxable rather than tax-deferred. What will be the after-tax value of his $10,000 investment after five years (assuming annual compounding)?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter1: Federal Income Taxation—an Overview

Section: Chapter Questions

Problem 63P

See similar textbooks

Similar questions

Someone in the 36 percent tax bracket can earn 7 percent annually on her investments in a tax-exempt IRA account. What will be the value of a one-time $18,000 investment in 5 years? 10 years? 20 years? You may use Appendix C to answer the questions. Do not round intermediate calculations. Round your answers to the nearest dollar. in 5 years: $ in 10 years: $ in 20 years: $ Suppose the preceding 7 percent return is taxable rather than tax-deferred and the taxes are paid annually. What will be the after-tax value of her $18,000 investment after 5, 10, and 20 years? Do not round intermediate calculations. Round your answer
a. Someone in the 36 percent tax bracket can earn 8 percent annually on her investments in a tax-exempt IRA account. What will be the value of a one-time $13,000 investment in 5 years? 10 years? 20 years? You may use Appendix C to answer the questions. Do not round intermediate calculations. Round your answers to the nearest dollar. in 5 years: $ in 10 years: $ 28,066 in 20 years: $ 60,592 b. Suppose the preceding 8 percent return is taxable rather than tax-deferred and the taxes are paid annually. What will be the after-tax value of her $13,000 investment after 5, 10, and 20 years? Do not round intermediate calculations. Round your answers to the nearest dollar. in 5 years: $ in 10 years: $ in 20 years: $ 19,101
A.Jenevive who is in the 36 percent tax bracket can earn 9 percent annually on her investments in a tax-exempt IRA account (Individual Retirement). What will be the value of a one-time ₱10,000 investment in 5 years? 10 years? 20 years? (assume annual compounding interest) Please answer immediately thank you :)
A taxpayer can invest $10,000 in a taxable 10-year bond that yields an annual pretax return of 6 percent or buy land (a capital asset) for $10,000 that is expected to increase at an annual pre-tax rate of 4 percent. The taxpayer expects to hold the bond and the land for 10 years and expects to pay capital gains taxes of 20 percent when the land is sold. The taxpayer’s marginal tax rate on ordinary income is expected to be 25 percent throughout the 10-year period. Can you please show in Excel? I like to use formulas when possible. Thank you!
Kun is thinking about investing $4,000 at the end of each year for 30 years in a tax-sheltered retirement account that will earn 8.5 percent annually. How much will Kun’s account total over 30 years if the growth in the investment remains sheltered from taxes?
1. Suppose you currently earn taxable income of $100,000 per year. You are subject to an MTR of 50 percent. Currently, your ATR is 35 percent. Calculate your annual tax. Calculate the extra tax that you would pay per year if your annual income increased to $110,000. What is your ATR when your annual income is $110,000?
A taxpayer can invest $1,000 in a money market fund that yields an annual pretax rate of return of 8% or buy an acre of land for $1,000 that appreciates at a 7% annual rate. The taxpayer plans to sell the land after 20 years and faces a 25% tax rate each year. (For purposes of this problem, ignore any risk differences between investments.) What is the after-tax accumulation at the end of 20 years from each investment? What is the annualized after-tax rate of return from each investment?
An individual earns an extra $1000 each year and places this money at the end of each year into an Individual Retirement Account (IRA) in which both the original earnings and the interest in the account are not subject to taxation. If the account has an annual interest rate of 7.5% compounded annually, how much is in the account at the end of 50 years? (Round your answer to the nearest cent.)
James Rivera from Exercise 5 has also decided to invest $1000 at the end of each 6 months in an IRA that grows tax deferred. Find the amount he will have accumulated if he does this for 15 years and earns 6% compounded semiannually.