4 (a). You contribute $5,500 to your traditional IRA every year for 20 and earn 8...

4 (a). You contribute $5,500 to your traditional IRA every year for 20 and earn 8 percent annually. If you are in the 24 percent income tax bracket, what will be your annual tax obligation when you withdraw the funds for the next 15 years if your funds continue to earn 8 percent? 4 (b). A widower currently has $107,500 yielding 8 percent annually. Can he withdraw $18,234 a year for the next 10 years? If he cannot, what return must he earn in order to withdraw $18,234 annually?

Expert Solution

a

Particulars	Amount
Contribution	5,500.00
× FVAF	45.76196
Future value	251,690.80
× PMT factor	0.11683
Annual withdrawal	29,404.92
Tax on it	7,057.18

b

Particulars	Amount
Balance	107,500.00
× PMT factor	0.14903
Annual withdrawal	16,020.67

Cannot withdraw 18234

Rate required is: 10.97% to withdraw 19234

jeff jeffy answered 2 years ago

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4 (a). You contribute $5,500 to your traditional IRA every year for 20 and earn 8...

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