Mya $is$ married, files a joint return, and expects $tobein$ the $24\%$ marginal tax bracket for the foreseeable future. All $of$ her income $is$ from salary and all $ofitis$ used $to$ maintain the household. She has a paid $up$ life insurance policy with a cash surrender value $of$ $$100,000.$ She paid $$60,000of$ premiums $on$ the policy. Her gain from cashing $in$ the life insurance policy would $be$ ordinary income. $If$ she retains the policy, the insurance company will pay her $at$ least

$$3,000(3\%)$ interest each year. Mya thinks she can earn a higher return $if$ she cashes $in$ the policy and invests the proceeds.

$a.$ What before$-$tax rate $of$ return would Mya $be$ required $to$ earn $on$ the proceeds from cashing $in$ the policy $to$ equal the return earned with the insurance company?

$b.$ Assume Mya estimates she can earn $a6\%$ before$-$tax rate $of$ return $on$ the proceeds from cashing $in$ the policy. Assume she can earn $a6\%$ return for the remainder $of$ her life and that she will reinvest all earnings $at$ the same $6\%$ before$-$tax rate $of$ return. $If$ Mya expects $to$ live $10$ more years, which alternative will yield the greater amount $to$ her beneficiaries upon her death? $(Given$: The future value $ofan$ annuity $in10$ years assuming $a4\mathrm{.}56\%$ after$-$tax return $is12\mathrm{.}19.$ The future value $ofan$ annuity $in10$ years assuming $a2\mathrm{.}16\%$ return $is11\mathrm{.}03).$