Trudy is 35 years old and is considering investing $2,000 per year in a savings account at 8%, or $2,000 per year in an RRSP at 8%, (both annual interest and ordinary annuities). The money will be invested for the next 30 years and will not be withdrawn until Trudy retires at the age of 65. Trudy pays 35% tax on ordinary income. Which of the following is correct? (Round your future value annuity factor to 3 decimal places.)
Trudy is 35 years old and is considering investing $2,000 per year in a savings account at 8%, or $2,000 per year in an RRSP at 8%, (both annual interest and ordinary annuities). The money will be invested for the next 30 years and will not be withdrawn until Trudy retires at the age of 65. Trudy pays 35% tax on ordinary income. Which of the following is correct? (Round your future value annuity factor to 3 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Trudy is 35 years old and is considering investing $2,000 per year in a savings account at 8%, or $2,000 per year in an RRSP at 8%, (both annual interest
and ordinary annuities). The money will be invested for the next 30 years and will not be withdrawn until Trudy retires at the age of 65. Trudy pays 35%
tax on ordinary income. Which of the following is correct? (Round your future value annuity factor to 3 decimal places.)
Multiple Choice
О
Trudy will have $9,736 more if she chooses the RRSP.
Trudy will have $19,320 more if she chooses the RRSP.
О
Trudy will save more if she chooses the savings account.
О
Trudy will earn the same amount of income under both choices.
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