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Matt recently deposited $27,500 in a savings account paying aguaranteed interest rate of 4.5 percent for the next 10years.(Do not round intermediate calculations. Round youranswers to the nearest whole dollar amount.)

a.

If Matt expects his marginal tax rate to be 22 percent for thenext 10 years, how much interest will he earn after-tax for thefirst year of his investment?



b.

How much interest will he earn after-tax for the second year ofhis investment if he withdraws enough cash every year to pay thetax on the interest he earns?



c. How much will he have in theaccount after four years?



d. How much will he have in theaccount after seven years?


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Casey Durgan
Casey DurganLv2
28 Sep 2019
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________1. Randy Hill wants to retire in 10 years with $500,000.He can earn 6% per year on his investments. Compute how much heneeds to deposit each year to reach his goal. ________2. Joe Morriswants to start a savings fund from which his grandson couldwithdraw $3,000 a year for 10 years. The fund would earn 5%interest. Compute the amount Joe would have to deposit now to reachhis goal. ________3. Your rich aunt has offered to finance fiveyears of college for you. The annual cost will be $30,000 and theinterest rate is 5%. Compute how much money your aunt must give younow to finance the five years of college. ________4. Assume yourfather is 55 and wants to retire at age 65 with $300,000 in aretirement fund. The interest rate is 8%. Compute how much he mustdeposit at age 55 to accumulate the $300,000. ________ 5. Assumeyou want to have $25,000 for a down payment for a house in fiveyears. Compute the amount you would need to deposit today. Yourmoney will earn 5 percent. ________ 6. Jeff Renfro is planning togo to graduate school (Ph.D) in a program of study that will takesix years. Jeff wants to have $35,000 available each year forvarious school and living expenses. He can earn 5 percent on hismoney. Compute how much he must deposit at the start of his studiesto be able to withdraw $35,000 a year for six years. ________7.Angie Baden deposits $10,000 a year into her retirement account.These funds will earn 8 percent over the 10 years until herretirement. Compute what the value of her retirement account willbe when she retires. ________8. Assume you borrow $80,000 with a 7percent interest rate, to be repaid in seven equal yearly payments.Compute the amount of each payment.

Please show me steps on how to solve these problems!..


1. Isabel, a calendar-year taxpayer, uses the cash method ofaccounting for her sole proprietorship. In late December shereceived a $26,000 bill from her accountant for consulting servicesrelated to her small business. Isabel can pay the $26,000 billanytime before January 30 of next year without penalty. Assume hermarginal tax rate is 40 percent this year and next year, and thatshe can earn an after-tax rate of return of 10 percent on herinvestments.


1-a. What is the after-tax cost if Isabel pays the $26,000 bill inJanuary?

(PV of single payment at various ARR: [0%- 1year: 0.909], [10%-2year: 0.826])


2. Daniel is considering selling two stocks that have not faredwell over recent years. A friend recently informed Daniel that oneof his stocks has a special designation, which allows him to treata loss up to $30,000 on this stock as an ordinary loss rather thanthe typical capital loss. Daniel figures that he has a loss of$36,000 on each stock. If Daniel%u2019s marginal tax rate is 35percent and he has $72,000 of other capital gains (taxed at 15percent), what is the tax savings from the special taxtreatment?


3. Matteo, who is single and has no dependents, was planning onspending the weekend repairing his car. On Friday, Matteo%u2019semployer called and offered him $200 in overtime pay if he wouldagree to work over the weekend. Matteo could get his car repairedover the weekend at Autofix for $148. If Matteo works over theweekend, he will have to pay the $148 to have his car repaired, buthe will earn $200. Assume Matteo pays tax at a flat 15 percentrate. (Do notround intermediate calculations. Round your answers to 2 decimalplaces.)


3-a. Considering monetary considerations only, should Matteo workor repair the car if the $148 he must pay to have his car fixed isnot deductible? work or repair?


3-b. Given the answerin a-1 above, by how much is Matteo better or worse off?


3-c. Considering monetaryconsiderations only, should Matteo work or repair the car if the$148 he must pay to have his car fixed is deductible for AGI? workor repair?


3-d. Given the answer in b-1 above, byhow much is Matteo better or worse off?


4. Marc and Michelle are married and earned salariesthis year of $64,000 and $12,000, respectively. In addition totheir salaries, they received interest of $350 from municipal bondsand $500 from corporate bonds. Marc and Michelle also paid $2,500of qualifying moving expenses, and Marc paid alimony to a priorspouse in the amount of $1,500. Marc and Michelle have a10-year-old son, Matthew, who lived with them throughout the entireyear. Thus, Marc and Michelle are allowed to claim a $1,000 childtax credit for Matthew. Marc and Michelle paid $6,000 ofexpenditures that qualify as itemized deductions and they had atotal of $5,500 in federal income taxes withheld from theirpaychecks during the course of the year.


4-a. What is Marc and Michelle%u2019sgross income?


4-b.What is Marc andMichelle%u2019s adjusted gross income?


4-c.What is the totalamount of Marc and Michelle%u2019s deductions from AGI?


4-d.What is Marc andMichelle%u2019s taxable income?


4-e.What is Marc andMichelle%u2019s taxes payable or refund due for the year?(Round your answer to two decimal places.)

Can I have the answer for a, b, d(future value factor) of theproblem below?

I put a, 75,469 b, 12,250 and d(future value factor) 1.063 andthey were all wrong.

Alex is 31 years old and has lived in Los Alamos, New Mexico,for the last four years where he works at the Los Alamos NationalLaboratory (LANL). LANL provides employees with a 401(k) plan andfor every $1 an employee contributes (up to 9 percent of theemployee’s salary) LANL contributes $3 (a 3-to-1 match). The planprovides a six-year graded vesting schedule. Alex is now in hisfifth year working for LANL, and his current year salary is$150,000. Alex’s marginal tax rate is 28 percent in 2016.

Answer the following questions relating to Alex’s retirementsavings in 2016. (Use Exhibit 13-2, Exhibit 13-3) (Do notround intermediate calculations. Round "Future value factor" to 4decimal places. Round final answers to the nearest whole dollaramount.)

a. Assume that over the past four years, Alex hascontributed $45,000 to his 401(k) and his employer has contributed$115,000 to the plan. The plan has an account balance of $175,000.What is Alex’s vested account balance in his 401(k)?




b. Because Alex considers his employer’s matchingcontributions “free money,” he wants to maximize the amount ofLANL’s contributions. What is the least amount Alex can contributeand still maximize LANL’s contribution?




c. In need of cash to build a home theater, Alexwithdrew $30,000 from his traditional 401(k) account. What amountof the withdrawal, after taxes and penalties, will Alex haveavailable to complete his project?




d. Assume that Alex contributes $10,000 to histraditional 401(k) account this year. Also assume that in 30 years,Alex retires (at age 61) and withdraws the $10,000 contributionmade this year and all the earnings generated by thecontribution. Also assume that his marginal tax rate at the time heretires is 25 percent. Ignore any prior or subsequent contributionsto his plan. If Alex earns a 6 percent annual before-tax rate ofreturn, what are his after-tax proceeds from the distribution?

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