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Kevin wills placed $1,600 per year into an IRA retirement account (in which the contributions were tax deductible and the earnings were tax deferred)...
Kevin wills placed $1,600 per year into an IRA retirement account (in which the contributions were tax deductible and the earnings were tax deferred) for 18 years. The account paid 5% per year. One half of the annual tax savings from contributions was deposited into a non-sheltered (fully taxable) corporate bond fund which paid 4% per year. The other half of the annual tax savings was invested in a stock mutual fund which paid no dividends but it increased in value at 7% per year. Assume the tax rate for Kevin is 25% on ordinary income (all taxable income except capital gains) for the entire period and the tax rate on capital gains (which applies to mutual fund profits) is 15%. How much money will Kevin have after taxes assuming he withdraws all money in year 18.