1-How much would you receive with replacement cost coverage for a four-year-old sofa destroyed by fire? The sofa would cost $885 to replace today, whereas it cost $800 four years ago and had an estimated life of 8 years.

2-You made a tax-deductible contribution to your individual retirement account (IRA) of $3900 this year. You pay a marginal tax rate of 25%. How much money do you save on taxes this year due to your IRA contribution?