Question: Below I list several Savings Vehicle types. Write out the after-tax accumulation formula for each SV type listed where the terms available for use in

  1. Below I list several Savings Vehicle types. Write out the after-tax accumulation formula for each SV type listed where the terms available for use in each formula are listed below and can be used more than once. Assume that tax rates are constant over time.

  3. $I = After-tax amount of initial investment
  4. R = before-tax rate of return per time period
    n = # of time periods
    tord = ordinary income tax rate (for interest income)
    td = dividend tax rate
    tcg = capital gains tax rate

Investment option

After-Tax Accumulation Formula

Savings Vehicle I (Money market fund)

Savings Vehicle II (Single-premium deferred annuity)

Savings Vehicle III (Mutual fund)

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