Lower tax bracket., Public Economics

Assignment Help:

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.


Related Discussions:- Lower tax bracket.

Contingent valuation method, Contingent  Valuation Method Norma...

Contingent  Valuation Method Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Command and control (cac), Normal 0 false false false E...

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

Policy for interventions to solve problem, A variety of interventions can a...

A variety of interventions can affect outcomes. The important one are, intervention to solve coordination problem, information as an interventions, interventions to change the dyn

Introduction of performance-related pay, Question: Awards for excellent...

Question: Awards for excellent performance are increasingly employed within the public service in many countries. These will or will not have a financial value. Performance-rel

Collectivist enforcement, The coordination problem relates us to not only t...

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

Health and safety control systems, The report which you should submit to me...

The report which you should submit to me should include: A brief analysis of the control systems required for the health and safety of operatives and others who may be affect

Case for improving upon the market system -pigovian analysis, Case for Impr...

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

Bowling Alone, What are your thoughts on Putman’s “Bowling Alone,” the idea...

What are your thoughts on Putman’s “Bowling Alone,” the idea that there has been a decline in social capital in North America? Do you agree or disagree with the assertion? Support

What can we do then while aiming at the public policy, Q. What can we do th...

Q. What can we do then while aiming at the public policy? From the above, one task emerges immediately, that is of quantifying all economic and non economic effects of a certa

Economics of Health Care, Deductibles and copayments are two common incenti...

Deductibles and copayments are two common incentive tools in insurance. (a)Explain which informational problems each tool primarily addresses. (b) If only one had to be used, indic

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd