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Sheena Maskell Sheena Maskell
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7 years ago
Kate can invest $4,000 of after-tax dollars (AT$) directly in a taxable bond outside an IRA, or she can contribute the $4,000 to a nondeductible IRA and invest in the same bond through the IRA vehicle. In either case the bond yields an annual 3% before-tax rate of return (BTROR). Kate's marginal tax rate is 15%, and she expects it to remain so for the entire investment horizon of 25 years. What is the after-tax accumulation for the "bond outside the IRA" after 25 years?
A) $5,585
B) $7,507
C) $8,375
D) None of the above.
Textbook 
Prentice Hall's Federal Taxation: 2011: Individuals

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
Authors:
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Yoko900Yoko900
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Sheena M. Author
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#2
7 years ago
I took a chance with your answer

It was right
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