In 2022, Nitai (age 40) contributes 10 percent of his $123,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 10 percent of the employee's salary. Nitai expects to earn a 4 percent before-tax rate of return. Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 25 years and that he makes no additional contributions to either account. What are Nitai’s after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1, Table 2.) Note: Round your intermediate calculations and final answers to the nearest whole dollar amount

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

In 2022, Nitai (age 40) contributes 10 percent of his $123,000 annual salary to a Roth 401(k) account sponsored by his employer, AY Incorporated. AY Incorporated matches employee contributions to the employee's traditional 401(k) account dollar-for-dollar up to 10 percent of the employee's salary. Nitai expects to earn a 4 percent before-tax rate of return.

Assume he leaves the contributions in the Roth 401(k) and traditional 401(k) accounts until he retires in 25 years and that he makes no additional contributions to either account. What are Nitai’s after-tax proceeds from the Roth 401(k) and traditional 401(k) accounts after he receives the distributions, assuming his marginal tax rate at retirement is 30 percent? (Use Table 1, Table 2.)

Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.

 

Future Value of Annuity of $1
25.0%
1.0%
1.00000
2.01000
3.03010
4.06040
5.10101
2.0%
1.00000
2.02000
3.06040
4.12161
5.20404
6.30812
7.43428
8.58297
3.0%
1.00000
2.03000
3.09090
4.18363
5.30914
6.46841
7.66246
8.89234
1.00000
2.03750
3.11391
4.23068
5.38933
6.59143
7.83861
9.13255
13.0%
1.00000
2.13000
3.40690
4.84980
6.48027
8.32271
14.0%
1.00000
2.14000
3.43960
4.92114
6.61010
8.53552
15.0%
1.00000
2.15000
3.47250
4.99337
6.74238
8.75374
20.0%
1.00000 1.00000
2.20000 2.25000
3.64000 3.81250
5.36800 5.76563
7.44160 8.20703
9.92992 11.25879
6.15202
7.21354
8.28567
4.0%
4.25%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
2.04000 2.04250 2.05000 2.06000 2.07000 2.08000 2.09000
2.10000
2.11000
2.12000
3.12160 3.12931 3.15250 3.18360 3.21490 3.24640 3.27810 3.31000 3.34210 3.37440
4.24646 4.26230 4.31013 4.37462 4.43994 4.50611 4.57313 4.64100 4.70973 4.77933
5.41632 5.44345
5.52563 5.63709 5.75074 5.86660 5.98471 6.10510 6.22780 6.35285
6.63298 6.67480 6.80191 6.97532 7.15329
7.33593 7.52333 7.71561 7.91286 8.11519
7.89829 7.95848
8.14201
8.39384
8.65402
8.92280 9.20043 9.48717 9.78327
9.21423 9.29671 9.54911 9.89747 10.25980 10.63663 11.02847 11.43589 11.85943
9.36853 9.75463 10.15911 10.47503 10.58280 10.69182 11.02656 11.49132 11.97799 12.48756 13.02104 13.57948 14.16397
10.46221 10.94972 11.46388 11.86784 12.00611 12.14622 12.57789 13.18079 13.81645 14.48656 15.19293 15.93742 16.72201
11.56683 12.16872 12.80780 13.31288 13.48635 13.66244 14.20679 14.97164 15.78360 16.64549 17.56029 18.53117 19.56143 20.65458 21.81432 23.04452 24.34928 32.15042 42.56613
12.68250 13.41209 14.19203 14.81212 15.02581 15.24309 15.91713 16.86994 17.88845 18.97713 20.14072 21.38428 22.71319 24.13313 25.65018 27.27075 29.00167 39.58050 54.20766
13.80933 14.68033 15.61779 16.36757 16.62684 16.89092 17.71298 18.88214 20.14064 21.49530 22.95338 24.52271 26.21164 28.02911 29.98470 32.08865 34.35192 48.49660 68.75958
14.94742 15.97394 17.08632 17.98135 18.29191 18.60879 19.59863
21.01507 22.55049 24.21492 26.01919 27.97498 30.09492 32.39260 34.88271 37.58107 40.50471 59.19592 86.94947
16.09690 17.29342 18.59891 19.65565 20.02359 20.39966 21.57856 23.27597 25.12902 27.15211 29.36092 31.77248 34.40536 37.27971 40.41746 43.84241 47.58041 72.03511 109.68684
17.25786 18.63929 20.15688 21.39274 21.82453 22.26665 23.65749 25.67253 27.88805 30.32428 33.00340 35.94973 39.18995 42.75328 46.67173 50.98035 55.71747 87.44213 138.10855
18.43044 20.01207 21.76159 23.19497 23.69751 24.21298
25.84037 28.21288 30.84022
33.75023 36.97370 40.54470 44.50084 48.88367 53.73906 59.11760 65.07509 105.93056 173.63568
19.61475 21.41231 23.41444 25.06478 25.64541 26.24203 28.13238 30.90565 33.99903 37.45024 41.30134 45.59917 50.39594 55.74971 61.72514 68.39407 75.83636 128.11667 218.04460
20.81090 22.84056 25.11687 27.00471 27.67123 28.35732 30.53900 33.75999 37.37896 41.44626 46.01846 51.15909 56.93949 63.43968 70.74941 78.96923 88.21181 154.74000 273.55576
22.01900 24.29737 26.87037 29.01739 29.77808 30.56250 33.06595 36.78559 40.99549 45.76196 51.16012 57.27500 64.20283 72.05244 80.94683 91.02493 102.44358 186.68800 342.94470
28.24320 32.03030 36.45926 40.27112 41.64591 43.07648 47.72710 54.86451 63.24904 73.10594 84.70090 98.34706 114.41331 133.33387 155.61956 181.87083 212.79302 471.98108 1054.79118
10.08901 10.40466 10.73049 11.06680 12.91590 15.07349
12.29969 12.75726 13.23276 13.72682 16.49908 19.84186
14.77566 15.41571 16.08535 16.78584 20.79890 25.80232
17.54874 18.41975 19.33730 20.30372 25.95868 33.25290
n
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
3.75%
Transcribed Image Text:Future Value of Annuity of $1 25.0% 1.0% 1.00000 2.01000 3.03010 4.06040 5.10101 2.0% 1.00000 2.02000 3.06040 4.12161 5.20404 6.30812 7.43428 8.58297 3.0% 1.00000 2.03000 3.09090 4.18363 5.30914 6.46841 7.66246 8.89234 1.00000 2.03750 3.11391 4.23068 5.38933 6.59143 7.83861 9.13255 13.0% 1.00000 2.13000 3.40690 4.84980 6.48027 8.32271 14.0% 1.00000 2.14000 3.43960 4.92114 6.61010 8.53552 15.0% 1.00000 2.15000 3.47250 4.99337 6.74238 8.75374 20.0% 1.00000 1.00000 2.20000 2.25000 3.64000 3.81250 5.36800 5.76563 7.44160 8.20703 9.92992 11.25879 6.15202 7.21354 8.28567 4.0% 4.25% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 2.04000 2.04250 2.05000 2.06000 2.07000 2.08000 2.09000 2.10000 2.11000 2.12000 3.12160 3.12931 3.15250 3.18360 3.21490 3.24640 3.27810 3.31000 3.34210 3.37440 4.24646 4.26230 4.31013 4.37462 4.43994 4.50611 4.57313 4.64100 4.70973 4.77933 5.41632 5.44345 5.52563 5.63709 5.75074 5.86660 5.98471 6.10510 6.22780 6.35285 6.63298 6.67480 6.80191 6.97532 7.15329 7.33593 7.52333 7.71561 7.91286 8.11519 7.89829 7.95848 8.14201 8.39384 8.65402 8.92280 9.20043 9.48717 9.78327 9.21423 9.29671 9.54911 9.89747 10.25980 10.63663 11.02847 11.43589 11.85943 9.36853 9.75463 10.15911 10.47503 10.58280 10.69182 11.02656 11.49132 11.97799 12.48756 13.02104 13.57948 14.16397 10.46221 10.94972 11.46388 11.86784 12.00611 12.14622 12.57789 13.18079 13.81645 14.48656 15.19293 15.93742 16.72201 11.56683 12.16872 12.80780 13.31288 13.48635 13.66244 14.20679 14.97164 15.78360 16.64549 17.56029 18.53117 19.56143 20.65458 21.81432 23.04452 24.34928 32.15042 42.56613 12.68250 13.41209 14.19203 14.81212 15.02581 15.24309 15.91713 16.86994 17.88845 18.97713 20.14072 21.38428 22.71319 24.13313 25.65018 27.27075 29.00167 39.58050 54.20766 13.80933 14.68033 15.61779 16.36757 16.62684 16.89092 17.71298 18.88214 20.14064 21.49530 22.95338 24.52271 26.21164 28.02911 29.98470 32.08865 34.35192 48.49660 68.75958 14.94742 15.97394 17.08632 17.98135 18.29191 18.60879 19.59863 21.01507 22.55049 24.21492 26.01919 27.97498 30.09492 32.39260 34.88271 37.58107 40.50471 59.19592 86.94947 16.09690 17.29342 18.59891 19.65565 20.02359 20.39966 21.57856 23.27597 25.12902 27.15211 29.36092 31.77248 34.40536 37.27971 40.41746 43.84241 47.58041 72.03511 109.68684 17.25786 18.63929 20.15688 21.39274 21.82453 22.26665 23.65749 25.67253 27.88805 30.32428 33.00340 35.94973 39.18995 42.75328 46.67173 50.98035 55.71747 87.44213 138.10855 18.43044 20.01207 21.76159 23.19497 23.69751 24.21298 25.84037 28.21288 30.84022 33.75023 36.97370 40.54470 44.50084 48.88367 53.73906 59.11760 65.07509 105.93056 173.63568 19.61475 21.41231 23.41444 25.06478 25.64541 26.24203 28.13238 30.90565 33.99903 37.45024 41.30134 45.59917 50.39594 55.74971 61.72514 68.39407 75.83636 128.11667 218.04460 20.81090 22.84056 25.11687 27.00471 27.67123 28.35732 30.53900 33.75999 37.37896 41.44626 46.01846 51.15909 56.93949 63.43968 70.74941 78.96923 88.21181 154.74000 273.55576 22.01900 24.29737 26.87037 29.01739 29.77808 30.56250 33.06595 36.78559 40.99549 45.76196 51.16012 57.27500 64.20283 72.05244 80.94683 91.02493 102.44358 186.68800 342.94470 28.24320 32.03030 36.45926 40.27112 41.64591 43.07648 47.72710 54.86451 63.24904 73.10594 84.70090 98.34706 114.41331 133.33387 155.61956 181.87083 212.79302 471.98108 1054.79118 10.08901 10.40466 10.73049 11.06680 12.91590 15.07349 12.29969 12.75726 13.23276 13.72682 16.49908 19.84186 14.77566 15.41571 16.08535 16.78584 20.79890 25.80232 17.54874 18.41975 19.33730 20.30372 25.95868 33.25290 n 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 3.75%
Future Value of $1
n
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
1.0%
1.01000
1.02010
2.0%
1.02000
1.04040
1.06121
1.08243
1.10408
1.03030
1.04060
1.05101
1.06152
1.07214
1.12616
1.14869
1.17166
1.08286
1.09369
1.10462
1.11567
1.12683
1.13809
1.19509
1.21899
1.24337
1.26824
1.29361
1.14947 1.31948
1.16097
1.17258
1.18430
1.19615
1.20811
1.22019
1.28243
1.34587
1.37279
1.40024
1.42825
1.45681
1.48595
1.64061
3.0%
1.03000
1.06090
1.09273
1.12551
1.15927
1.19405
1.22987
3.75%
1.03750
1.07641
1.11677
1.15865
1.20210
1.24718
1.29395
1.26677 1.34247
4.0%
1.04000
1.08160
1.12486
1.16986
1.21665
1.26532
1.31593
1.36857
1.42331
1.48024
1.53945
1.60103
1.66507
1.30477
1.34392
1.38423
1.42576
1.46853
1.39281
1.44504
1.49923
1.55545
1.61378
1.51259 1.67430 1.73168
1.55797
1.60471
1.65285
1.70243
1.75351
1.80611
2.09378
1.73709
1.80223
1.86981
1.93993
2.01268
2.08815
1.80094
1.87298
1.94790
2.02582
2.10685
2.19112
2.66584
2.51017
4.25%
1.04250
1.08681
1.13300
5.0%
1.05000
1.10250
1.15763
6.0%
1.06000
1.12360
1.19102
1.18115 1.21551 1.26248
1.23135 1.27628
1.28368 1.34010
1.33824 1.40710
1.39511
1.47746
1.45440 1.55133
1.51621 1.62889
1.58065 1.71034
1.64783 1.79586
1.71786 1.88565
1.79087 1.97993
1.86699 2.07893
1.94633 2.18287
2.02905
2.29202
2.11529 2.40662
2.20519 2.52695
2.29891 2.65330
2.83075
3.38635
7.0%
1.07000
1.14490
1.22504
1.31080
1.40255
1.50073
1.60578
1.71819
1.83846
1.96715
2.10485
2.25219
2.40985
2.57853
2.75903
2.95216
2.69277 3.15882
2.85434 3.37993
3.02560 3.61653
3.20714 3.86968
4.29187 5.42743
1.33823
1.41852
1.50363
1.59385
1.68948
1.79085
1.89830
2.01220
2.13293
2.26090
2.39656
2.54035
8.0%
1.08000
1.16640
1.25971
1.36049
1.46933
1.58687
1.71382
1.85093
1.99900
2.15892
2.33164
2.51817
2.71962
2.93719
3.17217
3.42594
3.70002
3.99602
4.31570
4.66096
6.84848
9.0%
1.09000
1.18810
1.29503
1.41158
1.53862
1.67710
1.82804
1.99256
2.17189
2.36736
2.58043
2.81266
3.06580
3.34173
3.64248
3.97031
4.32763
4.71712
5.14166
5.60441
8.62308
10.0%
12.0%
13.0%
14.0%
15.0%
20.0%
25.0%
1.10000
1.12000 1.13000 1.14000 1.15000 1.20000 1.25000
1.21000
1.25440 1.27690 1.29960 1.32250 1.44000 1.56250
1.33100
1.40493 1.44290 1.48154 1.52088 1.72800 1.95313
1.46410
1.57352 1.63047 1.68896 1.74901 2.07360 2.44141
1.61051
1.76234 1.84244 1.92541 2.01136 2.48832 3.05176
1.77156
1.97382 2.08195 2.19497 2.31306 2.98598 3.81470
1.94872
2.21068 2.35261 2.50227 2.66002 3.58318 4.76837
2.14359
2.47596 2.65844 2.85259 3.05902 4.29982 5.96046
2.35795
2.77308 3.00404 3.25195 3.51788 5.15978 7.45058
2.59374
3.10585 3.39457 3.70722 4.04556 6.19174 9.31323
2.85312
3.47855 3.83586 4.22623 4.65239 7.43008 11.64153
3.13843
3.89598 4.33452 4.81790 5.35025 8.91610 14.55192
3.45227
4.36349 4.89801 5.49241
6.15279 10.69932 18.18989
3.79750
4.88711 5.53475 6.26135 7.07571 12.83918 22.73737
4.17725
5.47357 6.25427 7.13794
8.13706 15.40702 28.42171
4.59497
6.13039 7.06733 8.13725 9.35762 18.48843 35.52714
5.05447
6.86604 7.98608 9.27646 10.76126 22.18611 44.40892
5.55992
7.68997 9.02427 10.57517 12.37545 26.62333 55.51115
6.11591
8.61276 10.19742 12.05569 14.23177 31.94800 69.38894
6.72750
9.64629 11.52309 13.74349 16.36654 38.33760 86.73617
10.83471 13.58546 17.00006 21.23054 26.46192 32.91895 95.39622 264.69780
11.0%
1.11000
1.23210
1.36763
1.51807
1.68506
1.87041
2.07616
2.30454
2.55804
2.83942
3.15176
3.49845
3.88328
4.31044
4.78459
5.31089
5.89509
6.54355
7.26334
8.06231
Transcribed Image Text:Future Value of $1 n 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 1.0% 1.01000 1.02010 2.0% 1.02000 1.04040 1.06121 1.08243 1.10408 1.03030 1.04060 1.05101 1.06152 1.07214 1.12616 1.14869 1.17166 1.08286 1.09369 1.10462 1.11567 1.12683 1.13809 1.19509 1.21899 1.24337 1.26824 1.29361 1.14947 1.31948 1.16097 1.17258 1.18430 1.19615 1.20811 1.22019 1.28243 1.34587 1.37279 1.40024 1.42825 1.45681 1.48595 1.64061 3.0% 1.03000 1.06090 1.09273 1.12551 1.15927 1.19405 1.22987 3.75% 1.03750 1.07641 1.11677 1.15865 1.20210 1.24718 1.29395 1.26677 1.34247 4.0% 1.04000 1.08160 1.12486 1.16986 1.21665 1.26532 1.31593 1.36857 1.42331 1.48024 1.53945 1.60103 1.66507 1.30477 1.34392 1.38423 1.42576 1.46853 1.39281 1.44504 1.49923 1.55545 1.61378 1.51259 1.67430 1.73168 1.55797 1.60471 1.65285 1.70243 1.75351 1.80611 2.09378 1.73709 1.80223 1.86981 1.93993 2.01268 2.08815 1.80094 1.87298 1.94790 2.02582 2.10685 2.19112 2.66584 2.51017 4.25% 1.04250 1.08681 1.13300 5.0% 1.05000 1.10250 1.15763 6.0% 1.06000 1.12360 1.19102 1.18115 1.21551 1.26248 1.23135 1.27628 1.28368 1.34010 1.33824 1.40710 1.39511 1.47746 1.45440 1.55133 1.51621 1.62889 1.58065 1.71034 1.64783 1.79586 1.71786 1.88565 1.79087 1.97993 1.86699 2.07893 1.94633 2.18287 2.02905 2.29202 2.11529 2.40662 2.20519 2.52695 2.29891 2.65330 2.83075 3.38635 7.0% 1.07000 1.14490 1.22504 1.31080 1.40255 1.50073 1.60578 1.71819 1.83846 1.96715 2.10485 2.25219 2.40985 2.57853 2.75903 2.95216 2.69277 3.15882 2.85434 3.37993 3.02560 3.61653 3.20714 3.86968 4.29187 5.42743 1.33823 1.41852 1.50363 1.59385 1.68948 1.79085 1.89830 2.01220 2.13293 2.26090 2.39656 2.54035 8.0% 1.08000 1.16640 1.25971 1.36049 1.46933 1.58687 1.71382 1.85093 1.99900 2.15892 2.33164 2.51817 2.71962 2.93719 3.17217 3.42594 3.70002 3.99602 4.31570 4.66096 6.84848 9.0% 1.09000 1.18810 1.29503 1.41158 1.53862 1.67710 1.82804 1.99256 2.17189 2.36736 2.58043 2.81266 3.06580 3.34173 3.64248 3.97031 4.32763 4.71712 5.14166 5.60441 8.62308 10.0% 12.0% 13.0% 14.0% 15.0% 20.0% 25.0% 1.10000 1.12000 1.13000 1.14000 1.15000 1.20000 1.25000 1.21000 1.25440 1.27690 1.29960 1.32250 1.44000 1.56250 1.33100 1.40493 1.44290 1.48154 1.52088 1.72800 1.95313 1.46410 1.57352 1.63047 1.68896 1.74901 2.07360 2.44141 1.61051 1.76234 1.84244 1.92541 2.01136 2.48832 3.05176 1.77156 1.97382 2.08195 2.19497 2.31306 2.98598 3.81470 1.94872 2.21068 2.35261 2.50227 2.66002 3.58318 4.76837 2.14359 2.47596 2.65844 2.85259 3.05902 4.29982 5.96046 2.35795 2.77308 3.00404 3.25195 3.51788 5.15978 7.45058 2.59374 3.10585 3.39457 3.70722 4.04556 6.19174 9.31323 2.85312 3.47855 3.83586 4.22623 4.65239 7.43008 11.64153 3.13843 3.89598 4.33452 4.81790 5.35025 8.91610 14.55192 3.45227 4.36349 4.89801 5.49241 6.15279 10.69932 18.18989 3.79750 4.88711 5.53475 6.26135 7.07571 12.83918 22.73737 4.17725 5.47357 6.25427 7.13794 8.13706 15.40702 28.42171 4.59497 6.13039 7.06733 8.13725 9.35762 18.48843 35.52714 5.05447 6.86604 7.98608 9.27646 10.76126 22.18611 44.40892 5.55992 7.68997 9.02427 10.57517 12.37545 26.62333 55.51115 6.11591 8.61276 10.19742 12.05569 14.23177 31.94800 69.38894 6.72750 9.64629 11.52309 13.74349 16.36654 38.33760 86.73617 10.83471 13.58546 17.00006 21.23054 26.46192 32.91895 95.39622 264.69780 11.0% 1.11000 1.23210 1.36763 1.51807 1.68506 1.87041 2.07616 2.30454 2.55804 2.83942 3.15176 3.49845 3.88328 4.31044 4.78459 5.31089 5.89509 6.54355 7.26334 8.06231
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