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Sati [7]
3 years ago
14

Ashton made contributions to a Roth IRA over the course of 32 working years. His contributions averaged $2,400 annually. Ashton

was in the 28% tax bracket during his working years. The average annual rate of return on the account was 8%. Upon retirement, Ashton stopped working and making Roth IRA contributions. Instead, he started living on withdrawals from the retirement account. At this point, Ashton dropped into the 15% tax bracket. Factoring in taxes, what is the effective value of Ashton's Roth IRA at retirement? Assume annual compounding.
1)
$330,608.49


2)
$300,608.49


3)
$310,592.49


4)
$231,920.99

Can someone tell me how to solve this?
Mathematics
1 answer:
enyata [817]3 years ago
3 0
The formula of the future value of an annuity ordinary is
Fv=pmt [(1+r)^(n)-1)÷r]
Fv future value?
PMT 2400
R 0.08
T 32 years
Fv=2,400×((1+0.08)^(32)−1)÷(0.08)
Fv=322,112.49
Now deducte 28% the tax bracket from the amount we found
annual tax 2,400×0.28 =672 and tax over 32 years is 672×32 =21,504. So the effective value of Ashton's Roth IRA at retirement is 322,112.49−21,504=300,608.49
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Answer: 8t+581

Step-by-step explanation:

<h3> The complete exercise is: "Omar works as a tutor for $15 an hour and as a waiter for $7 an hour. This month, he worked a combined total of 83 hours at his two jobs. Let "t" be the number of hours Omar worked as a tutor this month. Write an expression for the combined total dollar amount he earned this month."</h3><h3 />

Let be "t" the number of hours Omar worked as a tutor this month and "w" the number of hours Omar worked as a waiter this month.

Based on the data given in the exercise, you know that Omar worked a combined total of 83 hours this month.

Then, you can represent the number of hours he worked as a waiter this month with this equation:

w=83-t

Since he earns  $15 per hour working has a tutor and $7 per hour working as a waiter, you can write the following expresion to represent the total money earned:

15t+7w

Since w=83-t, you can substitute it into the expression and then simplify it in order to find the final expression that represents the total amount of money Omar earned this month.

This is:

15t+7(83-t)=15t+581-7t=8t+581

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