The maximum amount an individual can contribute to her Registered Retirement Savings Plan (RRSP) for a year is set by the Canada Revenue Agency. For the year 2011, the maximum contribution was the lesser of $21450 or 18% of the individual's "earned income" in 2010. The lowest amount of earned income for 2010 at which an individual could make a $21450 contribution in 2011 is $ Do not round your answer! Input the whole number part only, e.g., if the answer is 2566.65 input 2566. Do not include a $ sign, commas, or spaces in the answer.

The maximum amount an individual can contribute to her Registered Retirement Savings Plan (RRSP) for a year is set by the Canada Revenue Agency. For the year 2011, the maximum contribution was the lesser of $21450 or 18% of the individual's "earned income" in 2010. The lowest amount of earned income for 2010 at which an individual could make a $21450 contribution in 2011 is $ Do not round your answer! Input the whole number part only, e.g., if the answer is 2566.65 input 2566. Do not include a $ sign, commas, or spaces in the answer.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 13PAE

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Your grandparents decide they would like to put aside money to help support each of their grandchildren's educations. Assume that they would like to give each of their grandchildren $18000; that the money will be given when each grandchild turns 18; and that the money is in an account that earns 4.9%. They would like to know how much money they would need to set aside each time one of their grandchildren is born to be able to make this possible. How would your grandparents solve for P? $18000(F|P, 4.9%,18) O $18000(P|F, 4.9%,18) Neither
Sally will eam S33,000 this year and $42,000 next year. The real interest rate is 25% between this year and next year; she can borrow or save at this rate. She has no wealth at the start of this year and plans to finish next year having consumed everything she possibly can. She would like to consume the same amount this year as next year. How much should Sally save (or borrow) this year? save $4500 O save $4000 O borrow $4500 O borrow $4000
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Assume that an individual expects to work for 40 years andthen retire with a life expectancy of an additional 20 years.Suppose also that the individual’s earnings increase at a rateof 3 percent per year and that the interest rate is also 3 percent(the overall price level is constant in this problem). What(constant) fraction of income must the individual save ineach working year to be able to finance a level of retirementincome equal to 60 percent of earnings in the year just priorto retirement?
Abby lives and works for two periods. In the first period, she earns 1,000 coconuts while inthe second she earns 2,200 coconuts. Abby can save or borrow from a bank at the same interestrate of 10%. Abby also owns a 550 sq.ft. apartment, priced at 2 coconuts per square foot. Shecannot sell it in the first period because she needs a place to stay in the second, but she canborrow against it and sell it in the second.a. In a graph that has future consumption on the vertical axis and current consumption onthe horizontal, show how her lifetime budget constraint would look if banks do NOT requirecollateral. Make sure to compute and show the coordinates of the vertical and horizontalintercepts as well as those of the endowment point (which in the second period shouldinclude her house).b. Suppose that Abby likes to consume 2,400 coconuts in the first period. Could she do thatif banks do not require collateral? Would the outcome be Pareto optimal and why?c. Suppose now that banks do require…
Suppose that you earn $320 in year 1 and will ean $720 in year 2. If you borrow money against your future income you will have and additional $576 to spend in year 1, and if you lend all of your current income you will have and additional $400 to spend in year 2. In both years you consume only food which costs $1 per kilogram in each year. What is the interest rate that you borrow and lend at? R= Let your MRS for food in year 1 with food in year 2 be given by the formula where F is the amount of food consumed this year and F is the amount of food consumed next year. Calculate your consumption bundle: F = F = Suppose the interest rate at which you can borrow and lend changes to 20%. Calculate your new consumption bundle: F = F2 = Which interest rate is preferred? The initial interest rate found in part 1 O The new interest rate, 20%
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