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Pete has 43% marginal tax rate and plans to invest $ 10,000 in his RRSP so he will save $4,300 in current taxes by deducting
Pete has 43% marginal tax rate and plans to invest $ 10,000 in his RRSP so he will save $4,300 in current taxes by deducting the contribution he has calculated that this amount in his RRSP will grow to $22,000 by the time he retires in 10 years at that time he will withdraw the funds and he expects his marginal tax rate to be 27% so he will have $16,060 left after tax what is the net present value of his investment assuming an after tax rate of 5% as the appropriate discount factor?
A) 3,506
B) 9,859
C) 4,159
D) 14,149
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