You've just been hired by RhombiData. The new job includes company contributions to a qualified savings...
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You've just been hired by RhombiData. The new job includes company contributions to a qualified savings plan. RhombiData will make an annual contribution of $4,000 in Year 1 (payments are made all at once at the end of the year), but will then raise the amount it contributes by 3.0% annually for 7 years (Years 2 through 8); and then, as a loyalty incentive, will raise the annual increase to 5% annually starting with the Year 9 contribution. You anticipate that the average annual return on all contributions will be 7% compounded annually (which you also consider your discount rate). You plan to retire in 19 years, when RhombiData will have made 19 contributions-making all contributions on the last day of the year, including one on your last day of work. You know your salary amount but are trying to assess the value today of the company contributions to your savings plan. (You are excluding the value of your own savings contributions.) In today's dollars (PV), what are the nineteen (19) RhombiData contributions worth? $51,584 $55,050 $40,835 $25,757 $54,447 You've just been hired by RhombiData. The new job includes company contributions to a qualified savings plan. RhombiData will make an annual contribution of $4,000 in Year 1 (payments are made all at once at the end of the year), but will then raise the amount it contributes by 3.0% annually for 7 years (Years 2 through 8); and then, as a loyalty incentive, will raise the annual increase to 5% annually starting with the Year 9 contribution. You anticipate that the average annual return on all contributions will be 7% compounded annually (which you also consider your discount rate). You plan to retire in 19 years, when RhombiData will have made 19 contributions-making all contributions on the last day of the year, including one on your last day of work. You know your salary amount but are trying to assess the value today of the company contributions to your savings plan. (You are excluding the value of your own savings contributions.) In today's dollars (PV), what are the nineteen (19) RhombiData contributions worth? $51,584 $55,050 $40,835 $25,757 $54,447
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Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young
Posted Date:
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