Question

9. Matthew has a new job as business analyst. He plans to invest 15 percent of his annual salary after the tax into a retirement account at the end of every year for the next 25 years. Suppose that annual return is changing 4% function in Excel), and his current salary before tax is 80k which grow 3% per year. The tax will apply as 15% on the salary up to 50k and it is 20% for the salary interval of 50k and 80k and the tax rate will be 25% for the remaining salary more than 80k (for example if his salary will be 105k, he is paying 15% tax on his first 50k and 20% in the next 25 k and 25% on his next 25k of his salary). then:

Answer 1

• Current salary is 80,000 and that is growing at a rate of 3% per year.
• The salary is taxed in slab rates :
  • upto 50,000 - 15%
  • between 50,000 & 80,000 - 20%
  • more than 80,000 - 25%
• Salary after tax = Salary - tax amount
• Invested amount = Salary after tax * 15%

The following figure reveals the syntax