Month ou would like to have $750,000 in 34 years by making regular deposits at the
end of each month in an annuity that pays 8% compounded monthly. The table
below shows the 2016 marginal tax rates, standard deduction, and exemptions for
single person. Complete parts (a) through (c).
Tax Rate
Single
10% up to $9275
15%
$9276 to $37 650
25%
$37,651 to $91,150
28%
S91,151 to $190, 150
33%
$190, 151 to $413,350
35%
$413 351 to $415050
39 6% more than $415,050
Standard Deduction $6300
Exemptions
$4050
(per person)
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a. Determine the deposit at the end of each month
In order to have $750,000 in 34 years, you should deposit $ each
(Round up to the nearest dollar)
b. Assume that the annuity in part (a) is a tax deferred IRA belonging to a
man whose gross income in 2005 was $78,000 Use the table on the left
to calculate his 2005 taxes first with and then without the IRA Assume the
man is single with no dependents, has no tax credits, and takes the
standard deduction
The income tax with the IRA ISS
(Use the answer from part (a) to find this answer Round up to the nearest
cent as needed)
The income tax without the IRAISS
(Use the answer from part (a) to find this answer Round up to the nearest
cent as needed)
c. What percent of his gross income are the man's federal taxes with and
without the IRA?
The man's taxes are % of his gross income with the IRA
(Round to the nearest tenth as needed)
The man's taxes are % of his gross income wthout the IRA
(Round to the nearest tenth as needed)