Lower tax bracket., Public Economics

Jenna's boss has decided to pay her a one-time bonus of $5,000. She decides to save the money until she retires, 4 years from now. She contemplates two savings options. Option A is to save the money for four years outside of an RRSP in a
foreign corporate bond that will pay her 10 percent per year. Option B is to save for four years in an RRSP account with a domestic government bond that will pay her 8 percent per year. The marginal income tax rate that Jenna faces while she is working is 30 percent. When she retires her marginal tax rate will drop to 25 percent, as she will be in a lower tax  bracket. As her financial advisor, which option do you recommend? (Answer this by calculating the net amount of her bonus upon cashing in the investment at her retirement.

Posted Date: 3/16/2013 1:13:39 AM | Location : United States







Related Discussions:- Lower tax bracket., Assignment Help, Ask Question on Lower tax bracket., Get Answer, Expert's Help, Lower tax bracket. Discussions

Write discussion on Lower tax bracket.
Your posts are moderated
Related Questions
A dam is proposed on a stretch of wild river, a river that is currently used for recreation. The dam will generate electricity. The dam will have a useful life of 50 years, after w

Discuss the basic features of international policy coordination. There may be two sources of interdependence between national economic policies, club goods and horizontal spill

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

One of these is deregulator or privatization of public enterprises or utilities. Deregulation is a world wide phenomenon. But experience of power failure in California and Mumbai r

Case for Improving upon the Market System   Unlike the "optimistic followers"  of the "classical school" who believed  that markets  would  "natural!yn  or "automatically" prod

Question 1: i) Describe the concept of circular flow of income. ii) Comment on the view that ‘GDP is the best measure to evaluate economic growth and standard of living'. iii)

Probelm 1: (a) What are the main roles of Government in the economic development of a country? (b) What are some of the emerging issues affecting the role of Government?

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

1. If GDP is not a good measure of economic well-being, why then it is always used by the president in his/her STATE OF THE NATION''S ADDRESS?

The coordination problem relates us to not only the levels of activities like research and developments (R&D) and investments but also to the behaviour of institutions that charact