Question
Please do a step by step with formulas of both parts. 9a). Your company sponsors a 401(k) plan into which you deposit 10 percent of
Please do a step by step with formulas of both parts.
9a). Your company sponsors a 401(k) plan into which you deposit 10 percent of your $120,000 annual income. Your company matches 75 percent of the first 10 percent of your earnings. You expect the fund to yield 12 percent next year. If you are currently in the 31 percent tax bracket, what is your annual investment in the 401(k) plan and your one-year return?
9b). Using the information in Problem 9, and assuming all variables remain constant over the next 15 years, what will your 410(k)-fund value be in 15 years (when you expect to retire)?
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