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Posts: 1940
8 months ago
Elise contributes $1,000 to a deductible IRA. Her investment will earn 10% annually before taxes, and she will withdraw the accumulated amounts from the IRA after 20 years. She expects her tax rate to be 25% at that time and will not be subject to the 10% on early distributions. What is Elise's after-tax accumulation in the IRA?
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Posts: 1868
8 months ago
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Before-tax accumulation in the IRA [1,000(1.1)20]   6,727.50
Less: Tax on withdrawn accumulation (6,727.50 × .25)   (1,681.88)
Accumulated earnings after taxes   5,045.62
5 months ago
I took a chance with your answer

It was right
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