Chap017 |Compatibility Model - Word Tell me what you want to do References Maili

Question

Chap017 |Compatibility Model - Word Tell me what you want to do References Mailings Review View A.y.A- -12. 1Norrmal 11 No Spac_ Heading 1 Heading 2 Paragraph Styles 15, Harmon just deposited $1,000 into a qualified retirement plan. Using a tax rate of 2896, and a rate of return equal to 8%, how m uch money will Harmon have 5 years from now from this single $1,000 deposit? a $963 30 b. $105792 c. $1141.23 d $1469 33 110 16. Using the information from question 15, how much money will Harmon have if his $1.,000 is deposited into a nonqualified plan? a. $963.30 b. $1057.92 c. $1141.23 d. $1469.33 9 144 110 19 +

Explanation / Answer

15) The correct choice is B

Explanation : - The money Harmoon will have in 5 years equals $ 1000(1+0.08)5 (1 - 0.28)

The amount in 5 years equals $ 1057.92

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16) The correct choice is d

Explanation : - The amount Harmoon will have if it is contributed to a nonqualified plan equals $ 1000 ( 1+0.08)5 i.e. $ 1,469.33

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