Years outside of an rrsp, As she will be in a lower tax

Years outside of an rrsp

Assignment Help Business Economics

Reference no: EM139239

Q. 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 % every 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?

Reference no: EM139239

Questions Cloud

Effects associated with this emtr program : Discuss the incentive effects associated with this EMTR program regarding conclusion to join workforce

What is the initial acceleration : A piece of balsa wood with density 0.50g/cm^3 is released under water. What is the initial acceleration?? Repeat for a piece of maple with density 0.760 g/cm^3? Repeat for a ping-pong ball with the average density of 0.127 g/cm^3.

New computer system that would yield a before-tax return : The ABC Corporation is contemplating purchasing a new computer system that would yield a before-tax return.

What is the thickness of the fresh paint on wall : Before throwing a 1.49 kg discus, an athlete rotates it along a circular path of radius 1.18 m. The maximum speed of the discus is 25.7 m/s.

Years outside of an rrsp : As she will be in a lower tax bracket. As her financial advisor, which option do you recommend.

What velocity does the man acquire as a result : A 92 kg man standing on a surface of negligible friction shoves a 73 g stone lying at his feet, giving it a velocity of 4.0 m/s. What velocity does the man acquire as a result.

Mortgage-backed securities spread losses : Explain how did mortgage-backed securities spread losses during the mortgage default crisis.

Find out the maximum speed of the object : A 362 g object is attached to a spring and executes simple harmonic motion with the period of 0.200 s. If the total energy of the system is 6.71 J.

Find out the optimal price-quantity : Find out the optimal price-quantity if the firm can price discriminate but cannot charge a two part tariff.

User Account

All Pages