if you have $20000 in your savings account this year and it increases to $25000 next...

if you have $20000 in your savings account this year and it increases to $25000 next year, to what amount does the marginal tax rate apply

Solutions

Expert Solution

Income tax is applicable to income during the year.

In the given case, increase in savings is assumed to be by way of income (interest or other sources).

Hence amount on which marginal tax rate will apply= End balance-Beginning balance

=$25,000- $20,000 = $5,000.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

if you have $20000 in your savings account this year and it increases to $25000 next...

if you have $20000 in your savings account this year and it increases to $25000 next year, to what amount does the marginal tax rate apply

Suppose you have $800,000 in your savings account when you retire. Your plan is to withdraw...

Suppose you have $800,000 in your savings account when you retire. Your plan is to withdraw $6,000 a month as retirement income from this account. You expect to earn annual interest of 6 percent, compounded monthly, on your money during your retirement. How many months can you be retired until you run out of money? a. 285.14 b. 210.83 c. 262.59 d. 220.27 The dividends paid by a corporation a. are tax-deductible, i.e., reduce the taxable income of the corporation...

You wish to buy a car worth $20,000. You have the money in your savings account....

You wish to buy a car worth $20,000. You have the money in your savings account. Should you go ahead and pay cash for the car (out of your savings account) or should you get a car loan from the dealer or from your bank to pay for the car? How do your expectations about interest rates have an impact on your decision? Please give an explanation.

You currently have $2,500 in your savings account. You would like to have $10,000 five years...

You currently have $2,500 in your savings account. You would like to have $10,000 five years from today. How much must you deposit in equal amounts at the end of each month for the next five years in order to reach your goal at an interest rate of 9% per year, compounded monthly?

Suppose you have deposited $10,000 in your high-yield saving account today. The savings account pays an...

Suppose you have deposited $10,000 in your high-yield saving account today. The savings account pays an annual interest rate of 4%, compounded semi-annually. Three years from today you will withdraw R dollars. You will continue to make additional withdraws of R dollars every 6 months, until you have a zero balance after your last withdrawal 6 years from now. Find R.

You want to have $62,000 in your savings account 3 years fromnow, and you're prepared...

You want to have $62,000 in your savings account 3 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.9 percent interest, what amount must you deposit each year?

Periodic interest rates.You have a savings account in which you leave the funds for one year...

Periodic interest rates.You have a savings account in which you leave the funds for one year without adding to or withdrawing from the account. Which would you rather have: a daily compounded rate of 0.040%, a weekly compounded rate of 0.285%, a monthly compounded rate of .35%, a quarterly compounded rater of 4.00%, a semiannually compounded rate of 7.5%, or an annually compounded rate of 14%? What is the effective annual rate (EAR) of a daily compounded rate of 0.040%?...

Suppose you have a savings account earning 4.8% APR. you deposit $50 in the account at...

Suppose you have a savings account earning 4.8% APR. you deposit $50 in the account at the end of each week. What is the balance after 4 years

You start a savings account today by depositing $1,000 in an account. Each year you add...

You start a savings account today by depositing $1,000 in an account. Each year you add 3% to the amount you deposited in the previous year. You do this for 20 years (21 total payments including the payment today.) The interest rate is 6%. How much will you have in the bank at the end of year 20.

Would you rather have a savings account that pays 5% compounded annually, or an account that...

Would you rather have a savings account that pays 5% compounded annually, or an account that pays 5% compounded monthly? Be sure to explain your position here.

Subjects