Question

Question 11

Even if you have opened and contributed to a traditional or Roth IRA in the past, you can convert it (under specified conditions) into the other type of IRA. Which of these types of conversions is by far the more common:

From traditional to Roth |

From Roth to traditional |

Question 12

If you expect not to spend the contents of your IRA during your lifetime and would like to leave the money to your children, you should contribute to a Roth IRA rather than a traditional IRA.

True |

False |

Question 13

As a general rule, it is wise to contribute to a traditional IRA if you expect to be in a higher tax bracket when you retire than you are in now and contribute to a Roth IRA if you expect to be in a lower tax bracket when you retire than you are in now.

True |

False |

Question 14

Imagine that your mother is 62 years old and planning to retire at 66. If she puts $6,000 into a Roth IRA at the age of 62 and it grows to $8,000 by the time she retires at 66, can she withdraw the full $8,000 without paying any taxes?

Yes |

No |

Question 15

Suppose you contributed $5,000 per year to a ROTH IRA between the ages of 25 and 30. Your total contribution was $25,000, and your account is now worth $34,000. You are now 35 years old and would like to buy a house. How much of your IRA can you withdraw to make a down payment on the house without paying any taxes or penalties on the withdrawal?

$0 |

$10,000 |

$16,000 |

$25,000 |

$34,000 |

Answer #1

Q 11 Which of these types of conversions is by far the more common: From Roth to traditional

Q 12 you should contribute to a Roth IRA rather than a traditional IRA : TRUE

Q 13 if you expect to be in a lower tax bracket when you retire than you are in now : False

Q 14 can she withdraw the full $8,000 without paying any taxes? : False

Q 15 How much of your IRA can you withdraw to make a down payment on the house without paying any taxes or penalties on the withdrawal? : $ 10000

You have a balance in your Traditional IRA of $100,000 which you
expect to grow to $140,000 in the next 10 years. You had your
60th birthday last week. You are considering the
possibility of doing a “Roth Conversion” by withdrawing the entire
$100,000 balance from the Traditional IRA, paying state and federal
income taxes combined of 29%, and depositing the remaining $71,000
into a Roth IRA.
What annual rate of return would you have to earn on your ROTH...

For 15 years through age 62, you contribute $5,500 to your
traditional IRA and earn 4.5 percent annually. If you are in the 32
percent income tax bracket, what will be your annual tax obligation
when you withdraw the funds for the next 10 years if your funds
continue to earn 4.5 percent?

You just turned 20 years old and want to retire when you turn
65. You plan to put $3,500 every year into a ROTH IRA, a retirement
account from which you can withdraw money after retirement without
having to pay any taxes. You expect to earn a return of 4% on your
investments every year.
1. How much money can you expect to have at age 65 if you make
your first annual deposit now and your last one on...

Assume you make annual contributions to a Roth IRA of $1,250
per year beginning on your 25th birthday. Assume further
that the account is projected to earn an annual return of 7.15% and
that you will retire on your 65th birthday. What is the
projected balance in the account on the date of your retirement?
Assume no contribution on your 65th birthday. In other
words, the last contribution occurs at the beginning of the
40th year, on your 64th birthday....

You just turned 22 years old and want to retire when you turn
65. You plan to put $3,500 every year into a ROTH IRA, a retirement
account from which you can withdraw money after retirement without
having to pay any taxes. You expect to earn a return of 6% on your
investments every year.
Attempt 1/5 for 12 pts. Part 1 How much money can you expect to
have at age 65 if you make your first annual deposit...

Question 1 (Time Value of Money and WACC)
(a) You need to pay off a car loan within the next two years.
The payment will be $4,000 every
month. Today you have made a single deposit into a
return-guaranteed investment account
that will allow you to cope with all the monthly payments.
This account earns an effective
annual interest rate of 12.68250301%. The first payment will
be made in one month.
(i) Calculate the corresponding monthly rate for the
investment...

Question 1 (25 marks/ Time Value of Money and WACC
(a) You need to pay off a car loan within the next two years.
The payment will be $4,000 every month. Today you have made a
single deposit into a return-guaranteed investment account that
will allow you to cope with all the monthly payments. This account
earns an effective annual interest rate of 12.68250301%. The first
payment will be made in one month. (i) Calculate the corresponding
monthly rate for...

Question 1 (25 marks/ Time Value of Money and WACC)
(a) You need to pay off a car loan within the next two years.
The payment will be $4,000 every month. Today you have made a
single deposit into a return-guaranteed investment account that
will allow you to cope with all the monthly payments. This account
earns an effective annual interest rate of 12.68250301%. The first
payment will be made in one month.
(i) Calculate the corresponding monthly rate for...

****FOR THIS HOMEWORK ASSIGNMENT, YOU MUST SHOW ALL WORK
(CALCUATIONS) AND DRAW TIME LINES.
1) Jane is 25 years old and was able to save
$25,000. After doing some research, she
identifies a stock called HPG Industries that has a dividend yield
of 7% that has been consistent for the past 10 years. Based on this
information, she decides to invest in this stock. Considering that
HPG Industries pays the dividend consistently, how many years will
it take for Jane...

Discussion Question: What would you do case? (CH10) DUE
5/6
The words “Cessna Skyhawk” have special meaning for anyone who
has ever wanted to learn to fly. At 27 feet long and 8 feet tall,
with a 36-foot wingspan, a 140 mph cruising speed, and room for two
adults and their luggage, more people have learned to fly with a
Cessna Skyhawk than with any other plane in aviation history. In
fact, the Cessna Skyhawk is the best-selling plane of...

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