GEN COMBO PERSONAL FINANCE; CONNECT ACCESS CARD
12th Edition
ISBN: 9781260044416
Author: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes
Publisher: McGraw-Hill Education
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Chapter 1, Problem 7FPP
Calculating the
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Elaine Romberg prepares her own income tax return each year. A tax preparer would charge her $60 for this service. Over a period of
12 years, how much does Elaine gain from preparing her own tax return? Assume she can earn 5 percent on her savings. Use Exhibit 1-
B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)
Answer is complete but not entirely correct.
Future value of total gain
$1,002.78
Your retired client has
accumulated investment and
retirement assets. He is happy
with an after - tax lifestyle of $
165,000 a year at the end of the
year for 18 years. Leaving aside
issues of inflation, his assets can
will earn after-tax interest rate
of 10.90 percent per year
compounded annually. How
much has your client
accumulated? Round the answer
to two decimal places. Your
Answer:
Ruth has asked for help in determining whether she should receive her $32,500 bonus check
in the current year or next year. In the current year, her marginal tax rate is 24% and she
anticipates she will be in the 32% marginal tax bracket next year. What advice can you give
Ruth?
Net revenue from bonus $
Current year
Ruth should choose to receive her bonus in the
✓year.
Next year
Chapter 1 Solutions
GEN COMBO PERSONAL FINANCE; CONNECT ACCESS CARD
Ch. 1 - Prob. 1.1PQ1Ch. 1 - What are the some risks associated with financial...Ch. 1 - Prob. 1.1PQ3Ch. 1 - Prob. 1.1PQ4Ch. 1 - Prob. 1.2PQ1Ch. 1 - Prob. 1.2PQ2Ch. 1 - What factors influence the level of interest...Ch. 1 - Prob. 1.3PQ1Ch. 1 - Prob. 1.3PQ2Ch. 1 - Prob. 1.4PQ1
Ch. 1 - Prob. 1.4PQ2Ch. 1 - Prob. 1.5PQ1Ch. 1 - Prob. 1.5PQ2Ch. 1 - Prob. 1.5PQ3Ch. 1 - Prob. 1FPPCh. 1 - Prob. 2FPPCh. 1 - Prob. 3FPPCh. 1 - Prob. 4FPPCh. 1 - Prob. 5FPPCh. 1 - Prob. 6FPPCh. 1 - Calculating the Future Value of a Series of...Ch. 1 - Prob. 8FPPCh. 1 - Prob. 9FPPCh. 1 - Prob. 10FPPCh. 1 - Prob. 11FPPCh. 1 - Prob. 12FPPCh. 1 - Prob. 13FPPCh. 1 - Prob. 14FPPCh. 1 - Prob. 1FPACh. 1 - Prob. 2FPACh. 1 - Prob. 3FPACh. 1 - Prob. 4FPACh. 1 - Prob. 5FPACh. 1 - Prob. 6FPACh. 1 - Prob. 1FPCCh. 1 - Prob. 2FPCCh. 1 - Prob. 3FPCCh. 1 - Prob. 1CCCh. 1 - Prob. 2CCCh. 1 - Prob. 3CCCh. 1 - Prob. 4CCCh. 1 - Prob. 1DSDCh. 1 - Prob. 2DSDCh. 1 - Prob. 1AECh. 1 - Prob. 2AECh. 1 - Prob. 3AECh. 1 - Prob. 4AECh. 1 - Prob. 5AECh. 1 - Prob. 6AECh. 1 - 7. (Future value of an annuity) If, instead, you...
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- Answer each of the following independent questions. Ignore personal income taxes. Required: 1. Suppose you invest $4,000 in an account bearing interest at the rate of 12 percent per year. Complete the table to show how your accumulation grows each year to equal $7,896.00 after six years. 2. You have estimated that your educational expenses over the next three years will be $14,500 per year. Your account bears interest at 9 percent per year. Complete the table given below to show that $36,699.50 is the amount you need to fund your educational expenses. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose you invest $4,000 in an account bearing interest at the rate of 12 percent per year. Complete the table to show how your accumulation grows each year to equal $7,896.00 after six years. (Round your answers to 2 decimal places.) Year Beginning Balance Interest 1 2 3 4 5 6 End Balancearrow_forwardGinger Rogers deposits $3,000 a year into her retirement account. If these funds have an average earning of 8 percent over the 40 years until her retirement, what will be the value of her retirement account?arrow_forwardOne month from now, Kelly will make her first monthly contribution of $250 to a Tax-Free Savings Account (TFSA). She expects to earn 7% compounded annually. How long will it take for the contributions and accrued earnings to reach $55,000 Part 1 It will take ______ months to reach $55000arrow_forward
- Linda's salary is $49000 a year. As a part of it's incentive program the company decides to give her a raise of $1000 every year. What is the discounted value of her income for the next 11 years at j₁ = 6.2%? To keep things simple, assume Linda is paid her entire salary at the end of each year. Answer: $arrow_forwardYou are considering the tax consequences of investing $2,000 at the end of each year for 30 years in a tax-sheltered retirement account that will earn 9 percent annually. How much will you accumulate over 30 years if the growth in the investment remains sheltered from taxes? Round to the nearest cent. DO NOT INCLUDE COMMAS OR $. Type your response Submitarrow_forwardA client's child will be attending college in 7 years. Assume current tuition and fees are $37, 294, and inflation for college costs averages 1.96 percent. She can earn 9.94 percent on the money she invests for this purpose. The client wants to know how much she will need to set aside today to pay the first year's tuition and fees.arrow_forward
- Suppose that Thomas Lee is enrolled in a defined contribution plan in which the employer contributes $8,000 each year. Thomas is earning $80,000 this year and his tax rate is 30 percent (which is not expected to change). Assume that the before- tax rate of return is 8 percent. (a) What is the additional amount of funds that Thomas will have when he reaches retirement in 10 years as a result of this year's service? (b) Suppose that Thomas's employer is planning to reduce half of their contribution to the defined contribution plan. Assume that Thomas would like to keep his retirement funds the same as they would have been with the defined contribution plan. If Thomas's only opportunity to save for retirement is in a nonqualified savings plan (no tax benefits), how much would Thomas need to receive in additional salary (which he would then save) to achieve his objective?arrow_forwardCarla Lopez deposits $2,500 a year into her retirement account. If these funds have an average earnings of 5 percent over the 40 hears until her retirement, what will be the value of her retirement account?arrow_forwardJames 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.arrow_forward
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