McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 25

In 2011, Nina contributes 10 percent of her $100,000 annual salary to her 401(k) account.She expects to earn a 7 percent before-tax rate of return.Assuming she leaves this (and any employer contributions) in the account until she retires in 25 years, what is Nina's after-tax accumulation from her 2011 contributions to her 401(k) account?
a.Assume Nina's marginal tax rate at retirement is 30 percent.b.Assume Nina's marginal tax rate at retirement 20 percent.c.Assume Nina's marginal tax rate at retirement is 40 percent.