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Exercise 19-21 (LO. 6) The AGI of the Newtons, a married couple, is $201,000 this year. They would like to contribute to a Roth IRA.
Exercise 19-21 (LO. 6)
The AGI of the Newtons, a married couple, is $201,000 this year. They would like to contribute to a Roth IRA.
a. What is the maximum amount this couple can contribute to a Roth IRA?
b. Suppose that the Newtons will report AGI of less than $201,000 and put $12,000 each year into their Roth IRA for 20 years, earning an annual return of 5%. What future value will accumulate in their Roth at the end of this period? The future value of an ordinary annuity at 5% for 20 years is 33.0660.
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