Question: Need Part 2 answered please show work Part 2. Take It Off the Top! Benefits of a 401 (k) for Retirement Saving One painless way

Need Part 2 answered please show work

Need Part 2 answered please show work Part 2. Take It Off

Part 2. Take It Off the Top! Benefits of a 401 (k) for Retirement Saving One painless way to save is to enroll in your company's 401 (k) plan if one is offered. The money is automatically deducted from your paycheck. There's a good chance you won't even miss it! Also, you don't pay income taxes on the money until you withdraw it (assuming you invest in a traditional 401(k)). Finally, your company may match a portion (and in some cases all) of the money you invest. Betty: A Case Study Betty makes $2300 per month. Her company offers a 401(k) plan and she decides to enroll. She chooses to invest $150 per month. Example: What will happen to her paycheck (take-home pay)? Her paycheck won't be $150/month less! Situation Type Take Home Pay Calculations Before 401(k) Monthly paycheck: $2300 Simplified Income taxes: $ 460 20% of $2300 Example Take-home pay: $1840 With 401 (k) Monthly paycheck: $2300 Income taxes: $ 150 deposited in 401(k): her bank Take-home pay: $ 430 20% of $2150 $1720 Betty will save about 20% of the $150, or $30 in federal and state income taxes. Consequently, her paycheck will be only $120 less, yet she will have $150 in her saving account. 8. Suppose Betty saves $200 each month in her 401 (k) account. How much less will her monthly take-home pay be? (Assume a combined 20% state and federal income tax rate, as in the example.) 9. Betty decides to set aside $200/month. If her monthly 401 (k) savings are earning 5.4% APR compounded monthly, what will the balance be in her account after 40 years? 10. Over the 40-year period, how much total money did Betty deposit into the 401(k)? 11. Over the 40-year period, how much less money did she receive in her paychecks

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