1. Irad Liu, of Commerce, Texas, is in the 25 percent marginal tax bracket and is considering the tax consequences of investing $2000 at the end of each year for 30 years in a tax-sheltered retirement account, assuming that the investment earns 8 percent annually. (a) How much will Irad’s account total over 30 years if the growth in the investment remains sheltered from taxes? (b) How much will the account total if the investments are not sheltered from taxes? 2. Over the years, Samuel and Elizabeth Paget, of Elon, North Carolina, have accumulated $200,000 and $220,000, respectively, in their employer-sponsored retirement plans. If the amounts in their two accounts earn a 6 percent rate of return over Samuel and Elizabeth’s anticipated 20 years of retirement, how large an amount could be withdrawn from the two accounts each month? Use the Garman/Forgue companion website or Appendix A-4 to make your calculations. 3. Stephanie and Cody Riley, of Newport, Rhode Island, desire an annual retirement income of $40,000. They expect to live for 30 years past retirement. Assuming that the couple could earn a 3 percent after-tax and after-inflation rate of return on their investments, what amount of accumulated savings and investments would they need? Use Appendix A-4 or the Garman/Forgue companion website to solve for the answer. 4. Isabel and Juan Selenas, of Edison, New Jersey, hope to sell their large home for $380,000 and retire to a smaller residence valued at $150,000. Afte
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