I have figured out Q1 and Q2 but I have no idea what to do for Q3. I have calculated the rate of return of SPDAs in the 2 situation specified in Q3 but I have no idea how to figure out the interest incurred without knowing the actual mortgage amount.

Fully-taxable bonds yield 10% per year before tax. x return on single premium deferred annuities (SPDAs) is 9.5%. 1. What are the after-tax rates of return per period (for Holdin Lol and 20 years) for an investment in (1) tax-exempt bonds; (2) taxable bonds; (3) SPDAs cashed xcise tax) and () SPDAs cashed out before age 59.5 requiring a 10% nondeductible excise tax kin he normal tax) on the accumulated interest, for an investor facing: (i) a 40% ordinary tax rate (ii): 30% ordinary tax rate each period? Tax Exempt Taxable SPDAS Bond Bond (no penalty) (with penalty) 3 years for a: 30% taxpayer 40% taxpayer 5 years for a: 30% taxpayer 40% taxpayer 10 years for a: 30% taxpayer 40% taxpayer 20 years for a: 30% taxpayer 40% taxpayer 2. How do optimal investment strategies change as a function of tax rates, lengths of investment horizon, and age? 3. At age 34.5, you deposited $50,000 into an SPDA yielding 9.5%. Ten years later, to finance the purchase of a second home, you require a mortgage exceeding the cash-out value of your SPDA. As an alternative to liquidating your SPDA, you can borrow funds at an annual interest rate of 11%, tax deductible, for fifteen years. Your current tax rate is 30%, and you expect it to remain at that level, How much better or worse off. after tax, will you be at age 59.5 if you invade your SPDA today (and incur the 10% excise tax) to reduce the size of the required mortgage