2. Jon bought a $150,000 10-year term annuity using a non-registered savings account. The annuity is...

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2. Jon bought a $150,000 10-year term annuity using a non-registered savings account. The annuity is to be treated as a prescribed annuity and earns 5% annually. How much TOTAL tax will Jon have to pay on ALL 10 PAYMENTS if the marginal tax rate on interest is 40% and the average tax rate is 30% and he has $80,000 of other pension income? (3 marks) 2. Jon bought a $150,000 10-year term annuity using a non-registered savings account. The annuity is to be treated as a prescribed annuity and earns 5% annually. How much TOTAL tax will Jon have to pay on ALL 10 PAYMENTS if the marginal tax rate on interest is 40% and the average tax rate is 30% and he has $80,000 of other pension income? (3 marks)

Answer rating: 100% (QA)

The total value of the annuity payments over 10 years is 150000 Since the ... View the full answer